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Financial report summary
?Competition
Live Nation Entertainment • Constant Contact • TripAdvisor • Reddit Inc. - Ordinary SharesRisks
- We have a limited operating history in an evolving industry which makes it difficult to evaluate our current business, future prospects, and increases the risk of your investment.
- We have a history of losses and we may not be able to generate sufficient revenue to achieve and maintain profitability.
- Factors adversely affecting the live event market could impact our results of operations.
- Our results vary from quarter-to-quarter and year-to-year. Our results of operations in certain financial quarters or years may not be indicative of, or comparable to, our results of operations in subsequent financial quarters or years.
- Our corporate strategy may not be successful.
- We pay recoupable advances, non-recoupable payments and/or advance payouts to certain creators. If these arrangements are insufficient to attract a catalog of highly popular events, do not perform as we expect or the scheduled events are
- fraudulent, cancelled, postponed or unsuccessful, our business, financial condition and results of operations may be harmed.
- Our marketing efforts to help grow our business may not be effective.
- Enforcement of our community guidelines may negatively impact our brand, reputation and/or our financial performance.
- Our platform might be used for illegal or improper purposes, all of which could expose us to additional liability and harm our business.
- The pricing and composition of our pricing packages may affect our ability to attract or retain creators.
- We generate a portion of our revenue from advertising. The loss of creator marketers, or reduction in spending by creator marketers, could result in a potential loss of consumers and adversely impact our business.
- Our global workforce works primarily remotely, which may impact our corporate culture and result in operational challenges or tax implications that may harm our business, financial condition and results of operations.
- Our software is highly complex, and we have in the past, and may in the future, discover previously undetected errors, failures, bugs or other vulnerabilities.
- Any significant system interruption or delays could damage our reputation, result in a potential loss of creators and adversely impact our business.
- If we do not continue to maintain and improve our platform or develop successful new solutions and enhancements or improve existing ones, our business will suffer.
- Some creators rely on our third-party distribution partners, such as Meta and Bandsintown, to connect with and attract consumers and we depend on this network of distribution partners to reach consumers.
- We rely on Internet search engines to drive traffic to our platform. Changes in Internet search engine algorithms and dynamics, our search engine visibility and rankings, search engine disintermediation, changes in marketplace rules or changes in privacy and consumer data access could have a negative impact on traffic on our platform or functionality of our product and ultimately, our business, financial condition and results of operations.
- Actual or perceived failures to comply with applicable laws, regulations, standards and other requirements regarding data privacy, security and the processing of personal data could adversely affect our business, financial condition and results of operations.
- If we or our third-party providers fail to protect information, including personal data or sensitive information about creators, consumers or employees and/or IT systems and operations against software or hardware vulnerabilities, service interruptions, data loss, ransomware, attacks or other cybersecurity incidents, we could experience a loss of creators or consumers, exposure to liability, or an adverse impact on our reputation, brand, business, financial condition or results of operations.
- We are incorporating generative artificial intelligence, or AI, into some of our products. This technology is new and developing and may present operational and reputational risks.
- We rely on the experience and expertise of our senior management team, key technical employees and other highly skilled personnel and the failure to retain, motivate or integrate any of these individuals could have an adverse effect on our business, financial condition and results of operations.
- Our payments system depends on third-party providers and is subject to risks that may harm our business.
- We face potential liability, expenses for legal claims and harm to our business based on the nature of the events business.
- We operate in a competitive landscape that is highly fragmented and compete with a variety of competitors to secure new and retain existing consumers and creators. If we cannot successfully compete with existing or potential competitors, our business, financial condition and results of operations will be harmed.
- Acquisitions, investments or significant commercial arrangements could result in operating and financial difficulties.
- If we do not manage the risks of operating internationally effectively, our business, financial condition and results of operations could be harmed.
- We are subject to risks related to environmental, social and governance matters, including related activities and disclosures.
- Our metrics and estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect our reputation and our business.
- Creator and consumer attraction and retention depend upon effective interoperation with operating systems, networks, protocols, devices, web browsers and standards that we do not control.
- We rely on software and services licensed from other parties. Defects in or the loss of software or services from third parties could increase our costs and adversely affect the quality of our service.
- If we fail to adequately protect our intellectual property rights, our competitive position could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights.
- We use open source software in our platform, which could subject us to litigation or other actions.
- Our results of operations may be adversely affected if we are subject to a protracted infringement claim or a claim that results in a significant damage award.
- Our failure to comply with the various export controls and trade and economic sanctions laws and regulations to which we are subject could subject us to liability, including civil and criminal penalties, or restrictions on sales.
- Our business is subject to a wide range of laws and regulations. Our failure to comply with those laws and regulations could harm our business.
- Failure to comply with anti-corruption, anti-bribery and similar laws associated with our activities outside of the United States could subject us to penalties and other adverse consequences.
- Failure to comply with payment network rules and to address the operational and compliance risks associated with our payments methods or practices could harm our business and results of operations.
- Failure to comply with laws and regulations related to payments could harm our business and results of operations.
- If currency exchange rates fluctuate substantially in the future, our results of operations, which are reported in U.S. dollars, could be adversely affected.
- Our business may be subject to sales tax and other indirect taxes in various jurisdictions. In addition, creators may also be subject to certain taxes.
- Our international operations subject us to potential adverse tax consequences and additional taxes.
- Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
- We identified a material weakness in our internal control over financial reporting and, as a result, determined that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2022, which resulted in the restatement of our previously issued unaudited condensed consolidated financial statements. Although we have remediated the material weakness, failure to establish and maintain effective internal control over financial reporting and disclosure controls and procedures in future periods could have a material adverse effect on our financial statements.
- We may not be able to generate sufficient cash flows or raise the additional capital necessary to fund our operations or other liquidity needs.
- Substantial levels of indebtedness could adversely affect our cash flow and our ability to operate our business and to fulfill our obligations under our indebtedness.
- We may not have the ability to raise the funds necessary for cash settlement upon conversion of the Convertible Notes or to repurchase the Convertible Notes for cash following a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the Convertible Notes or to repurchase the Convertible Notes.
- The accounting method for the Convertible Notes could adversely affect our reported financial condition and results.
- The capped call transactions may affect the value of the Convertible Notes and our Class A common stock.
- Provisions in the indentures governing the Convertible Notes could delay or prevent an otherwise beneficial takeover of us.
- The market price of our Class A common stock may be volatile and may decline regardless of our operating performance.
- The dual class structure of our common stock has the effect of concentrating voting control with our directors, executive officers and their affiliates and that may depress the trading price of our Class A common stock.
- If securities or industry analysts do not publish or cease publishing research, or publish inaccurate or unfavorable research, about our business, the price of our Class A common stock and trading volume could decline.
- Our issuance of additional capital stock in connection with financings, acquisitions, investments, our stock incentive plans or otherwise will dilute all other stockholders.
- We do not intend to pay dividends on our Class A common stock and, consequently, the ability of Class A common stockholders to achieve a return on investment will depend on appreciation in the price of our Class A common stock.
- Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current board of directors and limit the market price of our Class A common stock.
- Our amended and restated bylaws designate certain state or federal courts as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Management Discussion
- Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- Eventbrite’s mission is to bring the world together through live experiences. Since inception, we have been at the center of the experience economy, helping transform the way people discover and organize events. Our two-sided marketplace connects millions of creators and consumers every month to share their passions, artistry, and causes through live experiences. Creators use our highly-scalable self-service ticketing and marketing tools to plan, promote, and sell tickets to their events and event seekers use our website and mobile application to discover and purchase tickets to experiences they love.
- In 2023, Eventbrite creators hosted over 5 million free and paid events, issuing over 300 million tickets on our global marketplace which resulted in over $3.5 billion dollars in gross ticket sales for the year.