Eventbrite, Inc. (NYSE:EB) Q4 2023 Earnings Call Transcript

Eventbrite, Inc. (NYSE:EB) Q4 2023 Earnings Call Transcript February 27, 2024

Eventbrite, Inc. beats earnings expectations. Reported EPS is $-0.00927, expectations were $-0.05. Eventbrite, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Katherine Chen: Good afternoon, and welcome to Eventbrite’s Fourth Quarter 2023 Earnings Call. My name is Katherine Chen, Head of Investor Relations. With us today are Julia Hartz, our Co-Founder and Chief Executive Officer; and Lanny Baker, our Chief Financial Officer. As a reminder, this conference call is being recorded and will be available for replay on Eventbrite’s Investor Relations website at investor.eventbrite.com. Please also refer to our Investor Relations website to find our shareholder letter announcing our financial results. which was released prior to the call. Before we get started, I would like to remind you that during today’s call, we’ll be making forward-looking statements regarding future events and financial performance.

We caution that such statements reflect our best judgment as of today, February 27, based on the factors that are currently known to us and that actual future events or results could differ materially due to several factors, many of which are beyond our control. For a more detailed discussion of the risks and uncertainties affecting our future results, we refer you to the section titled Forward-Looking Statements in our shareholder letter and our filings with the SEC. We undertake no obligation to update any forward-looking statements made during the call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. During this call, we’ll present adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures.

These non-GAAP financial measures are not prepared in accordance with generally accepted accounting and have limitations as an analytical role. You should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. A reconciliation to the most directly comparable GAAP financial measure is available in our shareholder letter. We encourage you to read our shareholder letter, which contains important information about GAAP and non-GAAP results. And with that, I’ll now turn the call over to Julia.

Julia Hartz: Thank you to everyone joining us to review our fourth quarter and fiscal 2023 results. We took bold action this year to accelerate our two-sided marketplace model. Success meant delivering audience growth to our creators, tapping into new and vast consumer opportunities and driving increased financial returns for our business. I’m proud of the team for making progress on these priorities. Gross ticket sales totaled $3.6 billion in 2023 as we helped power the global experience economy. Our community grew to over 91 million people who love to go to events and nearly 1 million event creators who trusted Eventbrite to handle ticketing and promotion for over 5 million events last year. We democratized online advertising for our creators with the widespread release of our marketing tools.

For consumers, we helped to bring events to life with a richer and more personalized search and discovery experience. Our strong 25% top line growth for the year reflects our ability to serve ticketing, marketing and event discovery needs. Looking ahead to 2024, we remain focused on our goal of becoming the go-to marketplace for shared experiences. Thanks to our thoughtful product investments, the creator experience became more differentiated than ever during 2023. Our focus on generating demand has been a key driver in our marketplace transition. We’ve become a demand generation partner by providing marketing tools to all Eventbrite users. Over 75% of creators we surveyed already consider us a partner in boosting their event success. We believe our brand equity, consumer presence and ability to influence event marketing outcomes will set us apart from other solutions.

We’re happy with the progress made throughout the year on Eventbrite Ads. Our team has worked tirelessly to support a record number of creators who are looking to promote their events in the marketplace. In response to feedback from our creators, we have introduced new ways to tailor event listings, resulting in better ads efficacy and accelerated sign-up rates. With the implementation of AI-powered event and marketing flows, we drastically decreased the time it takes to create an event listing and marketing campaign. We continue to find new ways to apply conversational AI to serve our customers’ needs and generative AI to make hosting an event intuitive and successful. Each of these product areas focuses on addressing the most urgent need of creators, to sell more tickets and improve event success.

In 2023, we better positioned our team to deliver that outcome for our customers by repurposing investment resources toward growth enablement. Earlier this year, we restructured our teams to reduce operations overhead. We outsource customer support functions to the Philippines to streamline operations and scaled our development capacity in Spain and India. We believe this new operating mode will help us execute our proven ticketing playbook more efficiently. By doing this, we can focus on creating more value for our customers and also better target those creators in the future. We’ve already witnessed the advantages of this strategy in our financial performance. Although monetization has increased, we’ve been able to maintain moderate operational expense growth by improving efficiency and cost management on a daily basis.

We aim to continue these gains this year and strive to achieve even better results. Our decisions reflect our thoughtful transition to the two-sided marketplace model that we believe best serves creators and consumers and creates long-term value for our business. We’ve made strong progress on our product road map to support our marketplace repositioning over the past year. Where we now see the biggest opportunities are in honing our go-to-market strategy and continuing to improve our consumer product experience. This means attracting and winning creators who value and amplify our differentiation. It also means enhancing personalization and search and discovery to delight consumers and increase engagement. These are our immediate priorities as we address paid ticket growth and ensure each lever of our business positively reinforces our growth model.

As we look forward, we plan to evolve our sales and marketing in 2024 to target the events we know our most valuable consumers seek starting with Nightlife. We plan to supplement our value proposition to win this inventory and increase our total addressable market by building new tools that our creators want, like timed entry and better business empowerment tools. To make discovering events even easier, we plan to lean into distribution partnerships to put the right event in front of the right person at the right time wherever they are. To encourage repeat purchasing, we plan to evolve how consumers interact with our brand across all critical surface areas, starting with the consumer mobile app. We plan to continue building trust in our marketplace for both creators and consumers by anticipating and protecting against fraud as well as modernizing our support channels to deliver rapid problem resolution for more customers.

We believe that our focus on driving demand for creators, coupled with our consumer road map will yield great benefits for both sides of our marketplace and result in increased ticket growth. By leaning into our scale, trusted brand and powerful operating model, we are confident that we can chart a path forward, which enriches live events, brings the world together through live experiences and creates value for all stakeholders. With that, I’ll turn the call over to Lanny to discuss our financial performance and outlook.

Lanny Baker: Thank you, Julia. I’ll address financial highlights from the fourth quarter and full year before providing more detail on paid ticket performance and our actions there, and then I’ll turn to our outlook. Shifting toward becoming a two-sided marketplace has led to meaningful changes in our financial results over the past year. First, we’ve grown non-ticketing revenue from 2% to more than 10% of our revenue as of the fourth quarter of 2023. We’ve done this by deliberately delivering and extracting value associated with the demand generation we provide to creators. Subscription and per event organizer fees totaled $6.6 million in the fourth quarter as creators brought 1.4 million events to be ticketed in our marketplace during the quarter.

Eventbrite Ads revenue was $2.3 million in the fourth quarter, up 28% quarter-over-quarter as the number of advertisers and spend per advertiser both grew to new highs. Collectively, demand generation embodied by marketing tools, organizer fees and Eventbrite Ads revenue helped us reach a new revenue record in the fourth quarter, and we expect to build on this in 2024. Second, we updated our ticketing and service fees in early 2023 to reflect prior product investments and align with industry norms. As a result, we have increased our ticketing take rate and enhanced revenue per ticket by more than 10% during 2023. These gains strengthen our ability to further invest in the consumer side of our marketplace. And third, the changes in monetization arising from our marketplace strategy have helped our margins reach new highs.

Gross margin exceeded 70% for the first time during Q4 compared to 66% a year ago. Our adjusted EBITDA margin also improved. Excluding restructuring costs, reserve adjustments and other items, we more than doubled our adjusted EBITDA margin year-over-year, reaching 12% for the full year 2023, with 40% of year-to-year revenue growth flowing through to adjusted EBITDA. These encouraging financial benefits arising from our marketplace strategy have to be considered in the overall context of our business, however, and we’ve seen a near-term impact on paid ticket volume from the changes we’ve introduced. Paid tickets were down 4% in the fourth quarter versus the prior year, even as total revenue was up 23% year-to-year to $88 million, which was the midpoint of our Q4 business outlook range.

Paid ticket volume is expected to be lower year-over-year in the first quarter of 2024 as well, and this has been factored into our business outlook for the quarter and the full year. When organizer fees were widely implemented in September, October of 2023, this was the first time Eventbrite had imposed in charge associated with accessing our marketplace and our audience reach. The larger objective here was to shift our model and our go to market and to reposition Eventbrite as a marketplace, delivering attendees for creators and serving up great live experiences for consumers. We continue to have conviction in this strategy, and we are focusing on attracting creators of high-quality events who seek audience growth and showcasing the appealing events that feed strong consumer demand in order to improve paid ticket volume in 2024.

Nonetheless, we see recent paid ticket volume trends having a near-term impact, and I want to turn to what this means for our immediate operating priorities and then our business outlook for the coming year. We are pursuing three main levers to improve paid ticket growth. And in a marketplace mode, these efforts play on and reinforce each other. First, highly visible, high-volume, in-demand events are central to our marketplace. And we have focused inbound and outbound sales to target these strategic accounts. Our sales team closed 24% more new accounts in the second half of 2023, than in the same period last year. And that momentum remains strong in early 2024. With the changes we’ve made to monetization we can be very competitive and profitable in the sales channel today, and we’re leaning in here.

Next, we’re focused on the self-sign-on channel and making adjustments to move past what we believe is a temporary disruption in creator acquisition tied to the implementation of organizer fees. We intend to improve landing pages and sign-up flows, better explain and simplify our new pricing tiers through product marketing, and in some cases, adjust pricing, for instance, introducing annual plans for institutions that prefer to be built in advance and new rates for non-profits. Then on the consumer side, our near-term priorities are elevating the visibility of top events, either via Eventbrite Ads or through algorithm updates. We’re also steering users to the personalization and ease of our mobile app and investing in SEO and distribution partnerships to expand top-of-funnel traffic.

Combined, these actions are expected to improve paid ticket volume growth as the year unfolds. Based on current information, we anticipate revenue of $359 million to $372 million for full year 2024. The midpoint of that range would equate to 12% revenue growth over 2023. For the first quarter of 2024, our business outlook anticipates revenue in the range of $84 million to $87 million or 10% year-to-year revenue growth at the midpoint for the first quarter. There are a number of assumptions reflected in our quarterly and full year revenue outlook, including the following: paid ticket volume is expected to be lower year-to-year in the first half and down slightly to up modestly for the full year. As comparisons become easier, we move beyond the initial marketplace changes, and we execute on our product, marketing and sales priorities.

Average ticket prices are expected to increase low single digits year-over-year, providing a similar sized benefit to ticketing revenue on top of the volume dynamics just described. Organizer fees will cycle fully into revenue for the first time in Q1, Q2 and Q3 of 2024 and are anticipated to contribute to revenue growth for the full year in the process. And Eventbrite Ads revenue is expected to scale further as we improve reach, targeting and efficiency and realize higher adoption rates among creators. We plan to manage expenses tightly to focus on improving paid tickets and executing the marketplace strategy. We anticipate adjusted EBITDA margins in the low to mid-teens for the year 2024, again, excluding potential impact from reserve adjustments and other items.

Product and development expenses, which as a percentage of revenue are already in line with our long-term model, are expected to grow faster than revenue for the full year as we build out consumer and marketplace functionality. Sales, marketing and support expenses, which grew rapidly in the second half of 2023 in support of the marketplace shift, are expected to grow modestly quarter-over-quarter during 2024. And we plan to manage general and administrative expenses as tightly as possible in order to drive operating leverage. Stock-based compensation is a focus as we make progress toward profitability. As we’ve shifted more teams to new locations and substituted other forms of incentive and reward, SBC as a percentage of revenue declined by 3 percentage points in 2023 versus 2022, and we plan to take more steps to continue that progress in 2024 and beyond.

In summary, we had a solid 2023, in which we achieved our overall financial objectives as we made significant strides in our marketplace strategy. In the process, we introduced changes in our go to market that we believe are both necessary and appropriate to unlock Eventbrite’s full potential. That potential lies in doing more for creators than ticketing and payment processing, and it centers on leveraging our unmatched scale, our brand recognition and technical capabilities to attract consumers and drive demand for creators’ events. We are fully focused on returning to paid ticket volume growth as we execute our strategy. I’ll now turn the call to the operator for Q&A.

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Q&A Session

Operator: [Operator Instructions] Your first question comes from Naved Khan from B. Riley Securities. Your line is now open.

Naved Khan: A couple of questions from me. Maybe one on the — on creator retention. And is that the metric that’s being affected? What — is it just new creator sign-ups that is more affected because of the increase in take rate? And the other is, is a related question. So with your efforts focused on sort of getting the paid creators that have the more in-demand events, how long do you think that effort has to be in place for it to kind of start showing up in the numbers and moving the needle?

Lanny Baker: Thanks for your question. I’ll address the first one, which was around retention and the impacts of the introduction of organizer fees, sorry. When we introduced the organizer fees, we anticipated that there would be some near-term impact in the marketplace. We did this in mind recognizing that there was a likely near-term opportunity cost to ticket volume and creator growth. But on the other side of that, there was the long-term benefit of extracting value for the investments we’ve made, significant investments in the performance of the product and the strength of the brand, the trust and safety of our marketplace, and really most importantly, the demand generation that we bring to events on the platform. And we’ve seen that.

And the impact in the short term has been some churn of creators who, for the first time, have faced fees to list their events on Eventbrite. It’s impacted our self sign-on acquisition funnel. And as we talked about, we’re taking steps to improve the clarity of our messaging, the marketing on the self sign-on side. And in time, we believe we’ll return to the kind of growth that we’ve seen in the past. I want to point out that we certainly have seen the vast majority of creators embrace our organizational fee — or organizer fees. And one surprise for us has been that there has been stronger adoption of the subscription version of those organizer fees than the a la carte event-by-event organizer fees. And we take that to be a reflection of the partnership that is established between Eventbrite and those creators of events on our platform.

Julia Hartz: On the strategic inventory side in terms of the paid creators with more in-demand events, this is really seen through both channels so self sign-on and sales. And while our sales efforts are focused on a smaller number of creators who are hosting larger events in top-tier metros based on aggregate consumer data that we can mine to look for things that we know people will want to do. The beauty of this business is that we also see high-quality consumer popular inventory coming through our self sign-on channel, which is a very much lower cost of acquisition channel. And so combined, when we think across both of those channels and when we look at the market through metros and again, through the consumer data that we have, we’re starting to get better at merchandising those events, making sure they are highly listed in any discovery or browse surface and then also engaging those customers to be buying ads on the site so that those promoted listings are, again, front and center.

This is a flywheel approach to a marketplace. It’s not uncommon, but it’s pretty early days for us to be oriented this way. And so I would say that we will get better and better at finding that signal throughout the year. And then we also see a latency of about 45 days on average between when a customer put their tickets on sale and when that event happens. So roughly speaking, across all of our events, it’s a pretty fast feedback loop. And what we found is that we can then take the data of what’s selling, and what’s working and reorient our sales and our marketing efforts towards finding more of those creators in, again, the metros that we really care about.

Operator: Your next question comes from Youssef Squali from Truist Securities. Your line is now open.

Youssef Squali: Okay. So let me just follow up on that line of question in event paid tickets. Maybe you can just help us try to reconcile the growth that you saw in paid events. I think that was up 2%. Growth in paid creators that was up 3%, but paid tickets was down 4%. Does that imply that you guys saw a bigger churn on the maybe larger creators and maybe larger events and then maybe as — even as you added more events, maybe smaller events and maybe smaller venues, et cetera. So maybe just help us maybe work through that or understand that better? And then Lanny, in the past, you had spoken about adjusted EBITDA margins being north of 20% by the fourth quarter, by end of 2024, I think. Does that guide still hold? Is that still contemplated in your annual guide as we look at the linearity of margin improvement throughout the year?

Julia Hartz: Yes. I can start from the paid ticket side. So when we rolled out our new marketplace fees, we expected that there would be some shift in the size of events that are happening on the platform. Actually, we haven’t seen as much change as we had originally anticipated, and we’re really tightly wired to understand the changes and be able to react accordingly. But I do think that we have seen some — right now, as we’re speaking, there is this adjustment or transition that’s happening because we are, for the first time, charging a fee for the marketing tools and demand generation tools that we offer to our customers, and we’re continuing to build momentum behind that demand generation value prop as we go to market more explicitly with it.

So, we’re dedicating our go-to-market motions toward the popular and in-demand events that I just spoke about. And we’re also taking actions to increase the trust and safety on — in our marketplace, so making sure that fraudulent events aren’t in the marketplace, making — really building the well-lit marketplace that we know we want to scale. So what are we doing about the obvious paid ticket differences or slowdown right now? We’re rolling out marketing tools and really focusing on making sure that all of our creators, now that they have access to these marketing tools, know the benefits and are adopting the tools. We’re in about mid-teens percentage of creators using these tools, and we continue to see that creators using the marketing tools are significantly outperforming on a same-store basis, roughly 60% or so increase.

We’re also making strides in our demand generation messaging to our customers. We recently ran a survey across our customer base, and 75% of creators we surveyed view us as a demand generation partner. So that’s great on positioning. And then now we’re focusing on heightened emphasis on the head inventory. So, we expanded our sales team by 50% in the second half of last year, and that sales team has closed 24% more customers in the second half year-over-year. And we’re seeing that momentum continue into the early part of this year. So deals that we have targeted and closed, again, are focused on metros, so San Francisco, New York, London, L.A., et cetera. And these deals are, on average, 15% larger already than the prior three quarters of the year.

So, there’s some good momentum. We can definitely lean in there more. We can remain disciplined and close profitable sales deals because we have the benefit of this demand generation capability, because we have the scale and because we can show these customers that we can help them sell more tickets. So I have a lot of confidence in us being able to increase paid ticket sell-through on Eventbrite by doing two things really well, creating better opportunity for this highly popular event content to sell out; and second, being able to increase our retention and engagement of consumers. And that’s an area of investment for us, particularly through the mobile app.

Lanny Baker: Yes. In respect to the EBITDA margins, our long-term target is 20% or better. And we can control the EBITDA margin, and we do believe that’s in our future. We’ve made considerable progress over the last year and really over the last three years on the profitability of the Company. Our current outlook on 2024 does not anticipate us getting to that 20% target during this year. The way that we will get there is by resuming stronger core ticketing growth. We’ve built a much more efficient engine. Revenue per ticket, gross profit per ticket is stronger today than it’s ever been and then blending in more of the high-margin non-ticketing revenue from organizer fees and advertising and the like. We’ll control corporate overhead, and we’ll utilize the lower-cost locations that we’ve built into our system around the world to continue to drive long-term margin expansion.

In the meantime, we will also continue to invest in our product, in our marketing, in our sales so that long-term target is still within our — we have a line of sight to that, but it will not happen in 2024.

Operator: Your next question comes from Justin Patterson from KeyBanc. Your line is now open.

Sergio Segura: Great. This is Sergio on for Justin. So a few questions for us. On the 2024 guidance, the revenue growth on the guidance implies some deceleration there. So just hoping you could give us some detail on what gives you confidence in these demand generation products and the reaccelerating ticket growth? I think you mentioned the three priorities earlier in the prepared remarks. So maybe if you could provide more color there and what gives you confidence and then on the follow-up on the lower ticket volumes, slower growth from the organized fees? Just wondering how that has played out versus your expectations. And anything you could maybe provide on how you plan to show the value and introduce these new tools to these advertisers either churned or are filling the friction to sign up? So how you’re just functionally putting the product in front of them for them to try?

Julia Hartz: Sure. Thank you for the questions. So on our demand generation proposition and really what we’re focusing on for our creators, we come into this year with two very distinct value propositions that we really haven’t had in the past. So think about marketing tools, the ability for creators to use our aggregate consumer data to build look like audiences and deploy social paid advertising effectively, and you imagine that we can increase the surface area options for those ads. We’re seeing 5x to 6x ROA on the product already and much stronger adoption now that we are offering it across the board. We’ve seen mid-teens adoption so far, and we’ve only been in market for a few months. So, we think that there is some considerable upside in helping creators become better marketers and look to Eventbrite to help them spend their marketing budget, which is typically 40% to 50% of the face value of their ticket.

We see the strengthening of our own gross margins in offering features like Eventbrite Ads. We are targeting our highest value creators, both with ticketing and advertising for the first time in the Company’s history. So as we improve things like consumer traffic and relevance and personalization, we improve consumer engagement, and we expand the ad inventory options throughout the Eventbrite discovery experience. That’s also going to boost the adoption of Eventbrite Ads, which is a much stronger gross profit product for us. So all told, marketing tools and Eventbrite Ads is already about 10% of our revenue mix. As we continue to scale paid ticketing, we think that combination is pretty killer, and that’s what gives me confidence for this year and beyond.

Lanny Baker: And thinking about the ticket volume impact and the introduction of organizer fees, we weigh carefully the short-term opportunity cost of some disruption to our ticket volume against, as I said earlier, the long-term value of extracting more for the investment we’ve made in our product and for the demand generation that we drive. In the fourth quarter, that revenue balance, if you look at the paid tickets, perhaps the negative impact on paid tickets versus the additional revenue from organizer fees, it was a positive trade-off for us on a revenue — dollar-for-dollar revenue in the fourth quarter, and it will be so again in the first quarter this year. And those organizer fees are higher margin revenues than the ticketing revenue.

Now most importantly, we will rebuild the strength of the paid ticket volume, and we’ll get paid ticket volume back to growth through the things that we talked about. And as we do, that will come with the improved monetization of the model overall that is earning us credit for the demand generation and the tools that we’re providing that are helping creators with their success.

Operator: Your next question comes from Dae Lee from JPMorgan. Your line is now open.

Dae Lee: I guess the first one. I don’t let you just on the call already. But how far along are you guys in rising through some of these organizer fee, introduction fee related problems? And secondly — I mean, it sounds like organizer fee, as long as the creators are using all of the features that come with it, it’s good value for them. So just wondering like why do you think some creators aren’t fully utilizing on some of the features that come along with it. It’s just a matter of not just realizing it’s there? Or is there something else related to that? And in terms of the paid ticket volume growth trend, are you seeing any changes in the competitive landscape that’s affecting that as well?

Lanny Baker: Okay. With the introduction of the organizer fees, I think from the creator’s perspective, this is the first time that there’s been a fee associated with listing your event on Eventbrite, and that has — there’s some natural market digestion with that. The vast majority of creators have, as you said, paid very affordable fees and stayed on the platform and continue to produce events and sell tickets. There had been some impact. It’s been greater on the free ticket side where Eventbrite has been free in all respects in the past. And today, we have a fee to list even free events. And we believe we’ll cycle through this introduction of the organizer fees. So I think it’ll probably take a — we think it will take throughout the first quarter into the second quarter, and we’ll be able to cycle past this disruption into the second half of this year.

Julia Hartz: And then on the feature side, in terms of adoption of marketing tools and Eventbrite Ads, I really think that’s a combo of us continuing to strengthen our demand gen messaging and certainly, with our recent creator survey showing that the vast majority of our creators surveyed agree that we help them sell tickets. We think that’s a good leading indicator that we can continue to connect them with the tools that they need to not only become better marketers themselves because, frankly, they know their communities. So they should be the ones as superheroes, but also to understand that they can unlock the value of buying promoted listing space and essentially through Eventbrite Ads in the marketplace. I think it’s awareness and then it’s building trust by showing results.

And so we are contemplating different ways to be able to allow our creators to test these tools. So we have a free trial today with our Pro subscription. We’ll also look to see if we can incentivize our larger creators and the creators of popular consumer inventory to be leveraging these tools on a free trial basis to induce adoption of the tools. In terms of the ticket volume trends that we’re seeing and any changes in the competitive landscape, no major changes have occurred other than us observing that some of the mid-market sales-driven companies continue to slow down and be challenged because the unprofitable nature of the deals they’re closing are starting to wear their balance sheets. We are leaning in and being very thoughtful, very aggressive, but also disciplined.

We run a profitable sales model. We think we have the best platform and technology out there. We think combined with our marketplace value proposition and ability to drive demand, we are the superior solution. So we’re going back out and into the market to engage customers that we know well, customers that we’re new to. And I’m really excited about some of our wins. We recently partnered and closed Bar Pop in Perth, Australia, Gingerline in London and the Calgary Folk Festival, and this is all within the last few weeks. These are indicative of the customers that we’ll continue to engage, and we’re going to be fierce competition for especially entertainment, nightlife and music in the metros we really care about.

Operator: Your next question comes from Cameron Mansson-Perrone from Morgan Stanley. Your line is now open.

Cameron Mansson-Perrone: Hi, everyone. A few if I can. First, you haven’t mentioned it, so I’m assuming that the answer is no to this, but I’m curious if consumer demand, if you’re seeing any softness there reflected in the paid ticket growth. And then on margin trajectory as we think about into next year, I think as ads and organizer fees continue to scale, that take rate and gross margins would improve off of 4Q levels. You just did a 68% group margin on full year ’23. So you have a couple of basis points, I think, at least — or sorry, a couple of hundred basis points of improvement, I think, year-over-year going into ’24 to help you kind of deliver the 12% low to mid-teens adjusted EBITDA guidance for the year. I just want to make sure I’m thinking about that right.

It seems like even outside of OpEx, there should be 200 bps of tailwinds there on the margin trajectory. And then I was wondering if you could help contextualize the 91 million people buying on the platform this year. Sorry if I missed it, but curious how much that was up year-over-year. And then as we think about your focus on demand gen, where do you think that can go over time?

Julia Hartz: Great. So on the consumer demand side, we are seeing steady, resilient growth in consumer interest. And I think that is indicative of the very broad nature of the inventory on our platform. We really benefit from being the largest mid-market ticketing marketplace that has multiple categories, multiple geos and with 5 million events, there’s a lot of variety in there, and we still see the mid-market as strong and growing. Consumer purchasing power is resilient with the average ticket price being about $40. We’ll continue to keep very close eye on consumer trends. We know that in upper ends of the market, there are differences in how creators are thinking about driving demand, and they’re looking for more efficient ways to sell tickets.

So, we know that we have the right solution when creators are starting to feel the pinch because maybe producing their event might be marginally more expensive or they’re getting nervous about consumer demand. We’re the perfect antidote to that. So what we’re doing is focusing on the appeal of our marketplace on a local basis, really driving home the message that we have the events people want and showcasing them readily through search and discovery, personalization, distribution and Eventbrite Ads. And our consumer reach was at record levels in 2023, so over 92 million consumers transacted a free or paid ticket, which was up 7% year-over-year.

Lanny Baker: On the — on your question about margin trajectory, Cameron, you’re right. As we layer in more of the non-ticketing revenue from advertising and organizer fees, those have a really favorable effect on gross margins. So as we’ve gone from 2% of revenue from those sources to now north of 10% and we expect to continue to grow the share of revenue coming from those higher-margin demand generation related services. That will continue to have a very favorable effect on gross margins. And so, I think the way you’re thinking about it is similar to what we are contemplating and the outlook that we’ve provided. We’ve, in the past, talked about an incremental profitability range that goes from 25% to 50% of revenue growth flowing down to the bottom line.

And our outlook for this year would be at the lower end of that range but within that long-term target. And I think, you’re understanding the margin trajectory in the same way that we’re thinking about it as we describe the outlook.

Operator: Your next question comes from Hamed Khorsand from BWS Financial. Your line is now open.