Vivid Seats Inc (SEAT) 2021 Q3 法說會逐字稿

Good morning and welcome to the Vivid Seats Third Quarter 2021 Earnings Conference Call. Following management's prepared remarks, we will open the call for Q&A session. I would now like to turn the call over to Ashley DeSimone.

Good morning, everyone, and welcome to Vivid Seats Third Quarter 2021 Earnings Conference Call. I'm Asley DeSimone, Managing Director at ICR. Joining me today to discuss Vivid Seats' results are Stan Chia, Chief Executive Officer, and Larry Fey, Chief Financial Officer.

By now, everyone should have access to the company's third quarter earnings press release filed earlier this morning. We have also provided supplemental earnings slides. The press release and earnings slides are available on the Investor Relations page of Vivid Seats' website at www.investors.vividseats.com.

During the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include statements related to Vivid Seats' anticipated financial performance and operating results, market opportunities, the future impact of COVID-19 on their operations, and their business strategy and plan.

These statements are neither promises nor guarantees and are based on management's current expectations and beliefs and involved risks and uncertainties that could cause actual results to differ materially than those described in these forward-looking statements.

Please refer to today's press release and the company's filings with the SEC including the risk factors section in the company's quarterly report on Form 10-Q for the quarter ended September 30, 2021 filed with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

On today's call, we will refer to adjusted EBITDA, a non-GAAP financial measure, as we discuss the third quarter's 2021 financial results. You will find the historical reconciliation of adjusted EBITDA to actual GAAP results included in the press release issued earlier today and available on the companies Investor Relations page at www.investors.vividseats.com. And now, I would like to turn the call over to Stan. Stan?

Good morning, everyone, and thank you for joining us today on our first earnings call as a public company. I'm Stan Chia, Chief Executive Officer of Vivid Seats who has had the privilege of leading since November of 2018.

As you know, we began trading on the NASDAQ several weeks ago. We are excited and humbled to have this amazing opportunity and look forward to this new chapter. I would like to thank our existing investors who rolled all of their equity as part of the business combination, our new partner, Todd Boehly, who has already provided meaningful financial and strategic benefits to the business, and our new public shareholders as we embark on this journey.

Most importantly, I want to thank our teammates at Vivid Seats for their relentless dedication and commitment through such a challenging environment last year and also for their fanaticism in creating exceptional experiences for all of our customers. These efforts not only culminated in us becoming a public company but also resulted in record-setting financial results in our third quarter.

Our third quarter performance reflected our highest single quarter results across all of our key financial metrics as the team delivered $713 million in marketplace gross order volume for GOV, $140 million in revenues, and $42 million in adjusted EBITDA.

Given this is our first earnings call as a public company, I will spend a few minutes providing some background on who we are, our mission, and what we believe makes us different. Vivid Seats is a leading online ticket marketplace committed to being the ultimate partner for connecting fans to the live events, artists and the teams they love.

We provide leading technology platforms and services that connects fans of live events and ticket sellers with a simple mission of enabling fans to experience it live. Attending live events create lifetime memories and we believe our marketplace delivers a seamless and trusted experience to help fans safely buy tickets to the events they want.

We differentiate ourselves by offering tickets across a wide range of events with competitive pricing, supplemented by a dynamic and unique loyalty program, Vivid Seats Rewards. We endeavor to provide our fans with exceptional value so they can attend more of their favorite events and make lifetime memory while doing so. Our ecosystem connects millions of buyers with thousands of sellers, resulting in over 17 million annual ticket purchases across 200,000 events.

During the height of the COVID-19 pandemic, we were able to set the minds of Vivid Seats customers at ease and assure them of cash refund options or loyalty awards credit which we paired with a donation to charity. We are proud that we were able to offer our buyers who wanted or needed cash that option.

But we also offered the alternative of enhanced future buying power by way of offering rewards cash loyalty credit for 110% of the full value of the order total. We want our fans to know that Vivid Seats is a safe and secure place to buy tickers backed by our 100% buyer guarantee, designed to give them peace of mind.

Because we are a two-sided marketplace, we also strive to enable our sellers to manage their inventory and complete transactions seamlessly. We offer SkyBox, one of the most widely adopted seller ERPs in the industry to sellers free of charge. We continually upgrade this platform to support evolving seller needs.

As I noted earlier, we had a record setting quarter. We generated $713 million of marketplace GOV, $140 million of revenues, and $42 million of adjusted EBITDA. Larry will provide more details later, but this performance builds on the positive momentum demonstrated last quarter and reflects the desire of fans to return to their favorite events.

While the emergence of the Delta variant in August of this year raised caution, venue operators responded by instituting admittance protocol that focused on requiring proof of vaccination and/or a negative COVID test to ensure live events remain safe. As a result of these efforts, as they say, the show went on with many fewer cancelations or postponements than we saw in 2020.

Beyond our financial performance, I'm very excited about the enhancements we made across our user experience and loyalty program. Our product and technology teams were hard at work last year, focused on innovating across our consumer platform, and we brought many of those efforts to life in the third quarter.

As a proudly Chicago headquartered company, we timed the product release schedule to coincide with the return of Lollapalooza, an iconic Chicago weekend music festival held in late July. Our new product suite encompassed redesigned web and app experiences, all carefully designed to enhance the user experience with search, discovery and personalization as well as under the hood performance and system enhancements. And best of all, all of these customer-facing elements were styled with the visual identity of our new brand.

At the same time, we enhanced our already unique loyalty program, Vivid Seats Rewards. Vivid Seats Rewards now allow every fans to earn 10% in value on every ticket purchase. And when combined with our competitive pricing is one of the strongest economic propositions out there. We didn't stop there though. We've continued to add value for our fans by adding perks that augment the actual event experience.

At launch, we announced the unique perk with DraftKings that rewards our users with free DraftKings dollars as they attain new loyalty tiers as well as our Surprise and Delight program where our users will occasionally receive surprise upgrades to better seats or access to unique events.

At our first event, Vivid Seats Rewards members received exclusive access to TAO in Chicago for an intimate Lollapalooza after party jointly hosted by our partners at Rolling Stone magazine and featuring an intimate performance by Roddy Rich.

We've also continued to forge partnerships that will continue building exceptional experiences for our customers. We've announced our partnership with Quarna adding the ability to give even more of our customers the convenience they need to experience it live.

Finally, we continue to seek ways to support our community through a number of programs like our continued partnership with Musicares. In the third quarter, we supported those in our industry impacted by Hurricane Ida and have now donated millions of dollars since the start of the COVID-19 pandemic. With that, I will turn it over to Larry to review our financials. Larry?

Thank you, Stan. I am delighted to have our first earnings call aligned with the reporting of record results. As Stan mentioned, we set company records for quarterly marketplace GOV, revenues, and adjusted EBITDA on the third quarter.

Our marketplace GOV of $713 million was fueled by the continued return of live events. Of note, the third quarter saw a meaningful increase in the number of marketplace orders of 37% sequentially relative to Q2 of this year.

At the same time, we saw a normalization of average order size or AOS, which we define as marketplace GOV divided by marketplace orders, which is closer to $300 in Q3 versus roughly $400 in Q2. This lower AOS is the result of a combination of normalcy in our event mix and some demand headwinds that we believe results at least in part from concerns related to the Delta variant that emerged in August and September.

Our revenues of $140 million were primarily driven by our strong marketplace GOV performance. I would note that our take rate, which we calculate by dividing our marketplace revenues by our marketplace GOV, increased by nearly 200 basis points from approximately 15% in Q2 to approximately 17% in Q3.

This increase is primarily related to elevated COVID-related cancellation activity that occurred in Q2. Underlying take rates remain marginally consistent with historical levels in our previously provided long-term forecast.

We generated a net loss of $2 million in the third quarter along with adjusted EBITDA of $42 million, which represents a 30% adjusted EBITDA margin. This adjusted EBITDA margin is reflective of strong marketplace GOV alongside the continued rebuilding of our teams from COVID levels to support the rapid return of volume.

On top of rebuilding our teams across functions, we're also adding a new public company cost which will impact adjusted EBITDA margins in the near term. While our strong margins in Q2 and Q3 support our belief and our long-term margin profile is up 30%, in the near term we anticipate our margins will be reduced as we ramp headcount and initiate broader marketing efforts.

We continue to generate positive cash flow in Q3 with our cash balance increasing by $27 million during the quarter to $488 million from $461 million as the end of Q2. This is continued cash generation. We will have a net cash position pro forma for the business combination.

Working capital has been a meaningful contributor to our cash flow thus far in 2021 as the return of volume has quickly rebuilt our cash flow. As a reminder, working capital is a consistent positive contributor to cash flow as we grow because we receive payments from our customers before remitting corresponding payments to our ticket sellers.

We have seen customers redeeming store credits created during the pandemic at a consistent pace and expect that will continue in coming quarters. These redemptions result in non-cash revenue and EBITDA unless we anticipate some working capital headwinds relative to the exceptional performance we have seen last [quarter] in 2021.

We provided full year 2021 guidance in late October. This full year guidance called for marketplace GOV of $2.225 billion to $2.325 billion, revenues of $420 million to $435 million, and adjusted EBITDA of $102 million to $107 million. With our performance through Q3, this full year guidance implies Q4 marketplace GOV is $700 million to $800 million, revenues of $140 million to $155 million, and adjusted EBITDA of $20 million to $25 million.

These marketplace GOV and revenue ranges are consistent with the first quarter being our seasonally strongest quarter and assumes the live event calendar remains consistent with expectations as announced by major promoters such as Live Nation but with some level of cancelation related impact as we continue to face uncertainty around COVID.

In Q4, we anticipate a lower adjusted EBITDA margins than we saw in Q2 and Q3 to reflect the beginning of our brand and broader marketing investments. We had originally planned for meaningful brand investments to begin in 2022.

But with the return of live events happening more quickly than originally anticipated, we have pulled forward our brand launch in the Q4 of 2021. With that, I will hand it back to Stan for closing remarks.

Thanks, Larry. To recap, we are thrilled to start our journey as a public company with record setting results across marketplace GOV, revenues, and adjusted EBITDA. Our positive momentum coupled with our robust balance sheet positioned us well to press our advantage as we launch our band building and broader marketing efforts and continue to improve our offerings for our fans and sellers.

We are excited about the opportunity ahead as we tell our story with our enhanced product and loyalty program in a period where we anticipate record demand to attend live events coming out of the pandemic. And with that, operator, I will open it up for questions.

Thank you. (Operator Instructions). Our first question coming from the line of (inaudible). Your line is open.

Okay. Thank you. Two questions, please. Any particular regions that you want to call out regular surprise to see outside demand trends because those regions are more open than the others? And second is any of the three key verticals you have, any particular one with the sports like sports coming back with an audience that was stronger than you thought or concerts or theater and comments around that would be great. Thank you.

Yes. In terms of the regions, starting at the country level, I'd say that Canada has lagged the U.S. a bit in terms of their reopening cadence, so seeing a slightly slower recovery there, so U.S. outpacing a bit. Within the U.S., the south, I think, has led it, Texas and Florida being the largest two states that I think were a bit ahead of others in terms of case of reopening.

But broadly speaking, I'd say that the U.S. seems to be well positioned as we enter 2022 with pretty much all regions having figured out the protocols and regulations to enable events and you can see that at across sports landscape in particular right now where across the country you're seeing stadiums filled with capacity.

And I just want to let you know, one thing I'd add, one of the other things we've tried which I think is a fairly bullish indicator is how much consumers are willing to travel. And as we've looked at the quarter, as we compare it to 2019, on average, consumers are now traveling almost 20% more than they used to for events. So, I think largely across the categories we see some strong sign of optimism and really that return in excitement around live events coming back.

And then I just back in question going into event categories. Certainly, sports came back the quickest. And I think theater came back the slowest with Broadway not reopening until September.

But against that backdrop, I'd say our -- as you'll see in the queue, our ratios across categories with pretty consistent with our historical levels. So, I think we feel good about what that pretends for next year as it relates to concert and theater opportunity when you have a full event calendar but within the numbers realized today is pretty consistent with past few years.

Okay. Thanks, Larry. Thanks, Stan.

Our next question coming from the line of Jason Bazinet with Citigroup. Your line is open.

So, I guess, a little basic question. You guys have obviously had a much better year this year than I think you thought a little while back. Without getting into specifics, how would you say influences your long term view? In other words, is this just a more rapid sort of climb out of the COVID of the debts and shouldn't be read as sort of broadly better for your business or do you think it's more a sign that your long-term forecast might be conservative? Thanks.

Yes. Hi, Jason. This is Stan. Thanks for the question. I think maybe it's helpful always to reground when you think about where we were when we projected. When we made those projections early, we were still in a world where I'd say vaccines were on the premise of being approved and live events really hadn't opened up yet. So, I think there were certainly some conservatism in our original projections.

As we look out, I think what I'd say is there is a once in a lifetime opportunity now as we look at people coming back and a surge of pent up demand. And I think there's still uncertainty in terms of how long is that going to last. Is that going to last through '23 and beyond or is that going to end in '22?

I think what we focused on though is certainly our ability to build what we feel is a best in class product. And as we look at the investments we've made that we've highlight on this call, launching a new brand, launching a unique and innovative leading loyalty program, combined with our competitive prices, I think what you'll see us continue to do is invest in value for the consumer.

And in line with that, be aggressive on the marketing front to make sure that as there is this opportunity to tap into high consumer demand that we are there to meet the needs of customers.

Thank you very much.

Our next question coming from the line of [Benjamin Bragg] with Deutsche Bank. Your line is open.

Thanks for the questions. I have two on marketing. Can you touch on the current marketing environment? We've heard from others that customer acquisition, particular on digital platforms, is increasing and challenging. And then the second one, the shifts to mobile ERP (inaudible) IBSA has -- in fact did their marketing stand at all? Thanks a lot.

Hi, [Benjamin]. Thank you for the question. I think the first thing as we look at the landscape in particular around digital marketing that's been one of the areas of historical strength for us.

We got our own proprietary platforms that allow us to be aggressive but disciplined on the digital marketing front using our own first party data. That is always historically and currently persist where on that front we are still first transaction profitable. So, we have a lot of room to continue to be aggressive versus competitors who might now have that proprietary platform.

With respect to how we think about customer acquisition cost in the long term, I think, we're certainly looking to blend that out as we invest in brand marketing where I think as you look at the impacts of a profitable digital marketing platform with sub 10% awareness, then I think there's only room for improvement across those fronts. I'll punch it over to Larry a little who can give you some framework for how to think throughout as well.

Yes. I think specific to the question on trajectory of marketing stand and efficiency we have not experienced what you touched on where cost have moved meaningfully outside the bounce of the historical norms in the channels that we're in today. As Stan alluded to, we are actively diversifying and extending the channels that we're in.

And I think you saw in our prior projections that we expect to increase our marketing spend in '22 by about $40 million relative to our 2019 models I would say is directionally indicative of a diversifying approach to get back brand awareness [felt] and make customers aware as they reengage with live events that we have a different proposition in some of the other alternatives out there.

Our next question coming from the line of Maria Ripps with Cannacord. Your line is open.

Thanks for taking the question and congrats on a strong quarter here. So, just to pull off from the supply side, it seems like there is a lot of interest on the artist side to recent touring, sports, (inaudible), can you maybe just talk about the sustainability of the this trend as we move into next year and beyond? And then I have a quick follow up.

Hi, Maria. Thanks for the question. Yes, I think, look, we continue to adding two sides. On the consumer side, we see all of the demand that we feel is strong and pent up in that release. On the supply side, I think what we've seen is a really encouraging sign of artist really looking to get out on tour.

I think if you look at Live Nations most recently earning they've talked about a number of artists that are out there and how many tickets they're selling already into '22. Certainly, as a secondary market, all of the benefits that you can see there I think you [report] would be applicable to us as well. But I think there is, at least for the foreseeable future, fairly string sentiment in strength in that supply line up, in particular on the live music side.

Got it.

I think the one other comment I'd point to from Live Nation they talked about their bandwidth to support the demand on the supply side. They actually highlighted that there is a limit to the number of major tours that the industry and infrastructure can support. And while they didn't explicitly say at the time like they alluded to budding up against that capacity, which is part of why they're looking to '23 and '24 pipelines already.

So, I think, certainly, relative to this it's a one and done type supply strength environment. I think we feel pretty good that there's going to be a longer run in that.

Got it. It's very helpful. And then secondly can you maybe share any color on your fee structure and way your sort of fees rank compared to some of your competitors? And are there any opportunities for efficiency gains that could maybe help reduce fees while maintaining margins?

Yes. So, we certainly looked to be competitively priced across the landscape. I think if you were to pull up a (inaudible) ticket across our and other marketplaces there's a pretty good chance that we're going to be the lowest price alternative. Just on that first transaction -- and I think in some you'll find we're meaningfully lower priced than certain alternatives. I'll leave it to your own exercise to figure out which are those fall into the close and not so close buckets.

Where I think it gets really compelling is on the loyalty program. If you complete purchases especially if you buy 10 tickets and you earn that free ticket, when you compare our competitive upfront prices where we're off already the lowest price and then layer on the benefits of the loyalty, it becomes a very meaningful difference.

And so, I think getting folks to that repeat behavior is where it gets exciting for us, both from the volume and a margin standpoint because if people know they have a better economic proposition with us, they would come directly to our properties. That helps with the margin on the pay grade that we are generating. And so, I think that will be the main efficiency over time as you can see consumer behavior of all do come direct to our side and repeat more frequently because of the loyalty partner.

Got it. That's very helpful. Thanks so much for the color.

Our next question coming from the line of [Andrew Miroff] from Raymond James. Your line is open.

Hi. Thanks for taking my question. I wanted to talk a little bit about the seller side of the equation. Can you give us some color on trends we're seeing with SkyBox? I guess, what are some of the key product improvements you've been making recently on the platform and what are you seeing in terms of non-SkyBox sellers on your platform coming on or share shifts among other ERP platforms? Thanks.

Hi, Andrew. Yes, great question. As two side of marketplace, we are actually really proud of the support that we provide to the seller part of the ecosystem and SkyBox remain a pivotal and key investment for us to continue to drive value there.

We've continued to enhance that on the technology front where sellers are now able to have more intelligent dashboards and data that's really helped them grow their businesses, which is a focus for ours. On top of that, we've invested in building up a fulfillment part of that organization for SkyBox users are well, assisting seller at a better cost structure to handle the logistics and fulfillment, both electronically and physically of tickets.

And what we've seen there is that we continue to grow share on ERP install base on the seller side where we've seen non-SkyBox users move on to the SkyBox at a high rate than they have in the past and that continues, I think, to drive deeper and more vested relationships with the seller community.

Thank you.

Our next question coming from the line of Thomas Forte with D.A. Davidson. Your line is open.

Great. So, first off, Stan and Larry, congrats on the quarter and making it public. So, one question and one followup, since this is your first call after coming public, can you talk about the long-term growth rate for the category and what gives you confidence in your ability to take share, including SkyBox and loyalty? And then one followup.

Yes. Thanks, Tom. So, I think as we view the long term industry growth rate, we think it's been 7% to 10% range and that figure is really normalized after you get through whatever benefits of the pent up demands that you see coming out of the pandemic look like.

Yes, I think like the slightly higher growth and that blended rate in the concert category in particular, perhaps slightly lower growth than that in sports, largely with driving that difference is the ability to have somewhat uncapped capacity in concerts, much easier to add more shows at venues than it is to add games to sports league.

So, I think we feel pretty good about that high single digit industry growth rate across Vivid Seats' history than a consistent share gainer. And so, as you touched on it, it feels really good with our relationships on both side of the marketplace. SkyBox is a wonderful tool to stay close to seller needs and evolving dynamics to make sure that we are enabling sellers to grow their businesses.

And alongside that, I think particularly excited about the opportunity high risk of growth consumer awareness [albeit] that is done in area that frankly has been underinvested in to date, so it anticipates some pretty meaningful benefit relative to that historical trajectory which already was taking share.

Thanks for that, Larry. Then the second question I had is on a long-term basis your business model generates very impressive free cash flow. How do you think about use of cash including investing in a business in M&A?

Hey, Tom. I think one of the great things, I think, I do say about our business and certainly some of the performances here is we find ourselves in a really, really strong position on the balance sheet where we're really in a net cash position now where we came from one where we had significant debt on the business.

As we look at the future, what you'll see is I think we got an option -- we got options in front of us, and certainly, playbook to execute on, one on the organic side where we can continue to drive, I'd say, really is around value to consumers and then driving awareness to that, whether it's through our brand marketing efforts or continuing to invest in our industry leading loyalty program. We're going to be aggressive there.

On the M&A side, I think, again, both with the strong balance sheet as well as a new public currency, we're also going to be certainly opportunistic and aggressive where [up pay] should surface. So, really, I come back to, I think, we are in a great spot from a balance sheet from a product that we have for consumers at a really opportune time to take advantage of those opportunities. And what you'll see us do is be aggressive as those opportunities surface.

Thank you, Stan. Thank you, Larry.

Thank you, Tom.

Our next question coming from the line of Dan Kurnos with Benchmark. Your line is open.

Great. Thanks. Good morning. Congrats, guys. Just a couple here. Just to go back to Jason's question. I know the elevated levels of AOS or ticket in -- the ticket prices, it may not be sustainable, but Live Nation also called out a structurally higher level of consumer spend in the marketplace right now.

So, it seems like they're trying to obviously raise kind of those premium sort of front of house type tickets, which feels like it will set at least a higher floor on sort of what the norm reverts to. And I don't know if we ever get the same large delta over time. But can you just kind of give us your thoughts on sort of how sustainable kind of the higher level of ticket price is and how it's impacting your forecast? And I have a followup. Thanks.

Yes. So, I think if you go back in time, you did see pretty steady growth in AOS that something in the GDP, GDP plus one to two-point range, so steady 3% to 4% increase in average order size, which I think would generally marching in tandem to pricing in the underlying primary. I think it intuitively makes sense that there's a correlation between primary and secondary pricing over time.

In our forecast that we had put forward previously, we essentially assumed that average order size stayed flat, so effectively a negative break from historical trajectory. I think what we've seen to date and what you hear on Live Nation's commentary suggest that if anything there's likely a break to the upside in their opinion versus our projected break to the downside from historical trends. So, I think there's certainly some optimism around the ability to do better than what we had put into our long term forecast previously.

In the near term, you can see AOS going from 400 in Q2 to 300 in Q3, we're still a little more in the contortion phase of supply and demand leveling out. I'm still optimistic that average order size will be robust next year. But we're not quite at the level of stability where I think you can go quarter to quarter and draw definitive conclusions on how pricing is pricing for the long term.

Got it. That's super helpful. And I know we talked a little bit about this on Analyst Day and still super early. But just any kind of update -- well, first of all, I heard you have at a live lead on ESPN radio the other day, so a very underappreciated channel although it's interesting.

Just any thoughts on how to -- as the (inaudible) continues to last year sort of what you're seeing KPIs, anything kind of updates on loyalty adoptions, just how you're thinking about possibly in that switch, understanding that you guys have super low unaided brand awareness anyway to target, but you've already seen the quadrupling which [GMV] shifting over to mobile and now you got new app launch. So, just kind of maybe you can pars some of that out for us as what you're looking for. Thanks.

Yes. Hey, Dan. So, I think we're -- glad you heard it because glad that we're making the wave literally there with folks. As Larry mentioned, I think, we've been aggressive in pulling forward some of our anticipated 2022 brand spend and I think what you experience and what we're currently testing is certainly the efficacy of what is non-digital channels for us, whether that is terrestrial, radio, certainly some media, some out of home.

We're doing that in select markets as we try to get a disciplined read on the efficacy there, being very cognizant that brand building is a long term effort.

As we continue to launch and we're very early in the progress, I think the one thing I'd tell you guys, which I think is a testament to i think the product that our teams have done as well as some of the early potential signs of brand awareness is we are seeing that our ad traffic is up and we're also seeing, I think, folks start to use the features embedded in our app like favoriting artists.

That's greater than 200% what they have historically, which I think are good long term indicators of the fact that they are starting to engage with our product beyond the transactional basis, engage with our brand. And when you combine that and with the currency, really the entrenched currency they have in our loyalty programs as well as the additional perks that we have and we'll continue to invest in, I think you feel fairly bullish about our ability to continue to build long term value for our customers.

Got it. And I'd give you guys a third, but if any color you guys want to offer publicly on the Draftkings investment knowing that that was, I think, done at a (inaudible) level?

Yes. I think we're certainly excited and thankful for that investment as we look to solidify the partnership there. Certainly, the Draftkings benefit for our users and our loyalty program is something that both of us were excited about and something that I think will continue to look at creative ways towards the other in the future.

Got it. Thank you so much for the color, guys, really appreciate it.

Yes. Thanks, Dan.

Our next question coming from the line of Daniel Adam with Loop Capital Markets. Your line is open.

Hi. Good morning. Thanks for talking the question. Two for me. First, you kind of alluded to this already, but (inaudible) clearly had some encouraging comments about the outlook for next year. And I guess at this point, how much visibility do you have guys have into 2022 and what kinds of quarterly cadence for GOV, revenues and EBITDA would you expect for next year?

And then second, just as a follow up on the Draftkings question, what would be the timing of any sort of partnership deals that we might see between Vivid and [tracking]? Thanks.

Yes. Thanks, Dan. So, on the outlook into 2022, I think in particular you'll find that concerts have a number of the major tours for the next year come on sale in late Q4 of the prior year. So, we are really entering that window where in the normal course of operations you'll see some pretty meaningful tours that have been announced and launched which provide a healthy amount of insight into the following year.

2022 is a bit of a unique one and that you had a number of previously scheduled concerts and tours that were postponed. And so, the 2020 calendar will be a mix of rescheduled and new events. So, we probably have a little more visibility sitting here today than we would normally on this day in a typical year. But still, the next six weeks will be a pretty meaningful and important window to get a better sense for how the calendar is going to be.

So the question on seasonality, at this point, barring anything unforeseen, which is certainly possible, but barring that, I would hesitate a fairly, quote/unquote, regular seasonality cadence. And then in a normal year, think of Q4 seasonally strongest. Roughly 30% of our year will occur in Q4 with the remaining 70% split readily across Q1 through Q3.

And then on the Draftkings question, I think we are excited to continue looking at the opportunity and maybe they're brushing on what we announced. When we announced our loyalty program and it's live currently, we've always been really bullish in, A, driving engagement with consumers into our app; and B, ways to look for adjacencies that had strong affinity for, again, our users.

And so, at launch of our new loyalty program, we already announced a very [deeper basking] where we [would lure] our users with free [basking] dollars that they attained through loyalty tiers. And so, I think that's probably stage one of what we'll do to continue really looking at ways to engage our users in unique ways where they really get augmented and accretive benefit from transacting with us.

Okay. Great. That's helpful. Thank you very much.

And I'm showing no further questions at this time. Ladies and gentlemen, that concludes our call for today. Thank you for your participation. You may now disconnect. Everyone, have a great day.