Vivid Seats Inc

Previous wording

We are an online ticket marketplace that utilizes our technology platform to connect fans of live events seamlessly with ticket sellers. Our mission is to empower and enable fans to Experience It Live. We believe in the power of shared experiences to connect people with live events delivering some of life’s most exciting moments. We operate a technology platform and marketplace that enables ticket buyers to easily discover and purchase tickets to live events and attractions and book hotel rooms and packages, while enabling ticket sellers and partners to seamlessly manage their operations. We differentiate from competitors by offering an extensive breadth and depth of ticket listings at a competitive value. The following table summarizes our Marketplace Gross Order Value (“Marketplace GOV”), revenues, net income (loss) and Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 (in thousands):

Current wording

We are an online ticket marketplace that utilizes our technology platform to connect fans of live events seamlessly with ticket sellers. Our mission is to empower and enable fans to Experience It Live. We believe in the power of shared experiences to connect people with live events delivering some of life’s most exciting moments. We operate a technology platform and marketplace that enables ticket buyers to easily discover and purchase tickets to live events and attractions and book hotel rooms and packages, while enabling ticket sellers and partners to seamlessly manage their operations. We differentiate from competitors by offering an extensive breadth and depth of ticket listings at a competitive value. The following table summarizes our Marketplace Gross Order Value (“Marketplace GOV”), revenues, net income and Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

See the “Key Business Metrics and Non-GAAP Financial Measure” section below for more information on Marketplace GOV and Adjusted EBITDA, which is a financial measure not defined under accounting principles generally accepted in the United States of America (“GAAP”).

Current wording

See the “Key Business Metrics” section below for more information on Marketplace GOV and Adjusted EBITDA, which is a financial measure not defined under accounting principles generally accepted in the United States of America (“US GAAP”).

Previous wording

The following table summarizes our key business metrics and non-GAAP financial measure (in thousands):

Current wording

The following table summarizes our key business metrics (in thousands):

Previous wording

Marketplace GOV represents the total transactional amount of Marketplace segment orders placed on our platform in a period, inclusive of fees, exclusive of taxes and net of cancellations that occurred during that period. During the three and six months ended June 30, 2024, Marketplace GOV was negatively impacted by cancellations in the amount of $21.2 million and $39.4 million, respectively, compared to $11.7 million and $23.8 million during the three and six months ended June 30, 2023, respectively.

Current wording

Marketplace GOV represents the total transactional amount of Marketplace segment orders placed on our platform in a period, inclusive of fees, exclusive of taxes and net of cancellations that occurred during that period. During the three and nine months ended September 30, 2024, Marketplace GOV was negatively impacted by cancellations in the amount of $35.4 million and $74.9 million, respectively, compared to $10.1 million and $33.9 million during the three and nine months ended September 30, 2023, respectively.

Previous wording

Total Marketplace orders represents the volume of Marketplace segment orders placed on our platform in a period, net of cancellations that occurred during that period. During the three and six months ended June 30, 2024, our Marketplace segment experienced 52,392 and 102,441 cancellations, respectively, compared to 29,351 and 49,831 cancellations during the three and six months ended June 30, 2023, respectively.

Current wording

Total Marketplace orders represents the volume of Marketplace segment orders placed on our platform in a period, net of cancellations that occurred during that period. During the three and nine months ended September 30, 2024, our Marketplace segment experienced 77,012 and 179,453 cancellations, respectively, compared to 28,203 and 78,034 cancellations during the three and nine months ended September 30, 2023, respectively.

Previous wording

Total Resale orders represents the volume of Resale segment orders in a period, net of cancellations that occurred during that period. During the three and six months ended June 30, 2024, our Resale segment experienced 1,211 and 2,083 cancellations, respectively, compared to 827 and 1,512 cancellations during the three and six months ended June 30, 2023, respectively.

Current wording

Total Resale orders represents the volume of Resale segment orders in a period, net of cancellations that occurred during that period. During the three and nine months ended September 30, 2024, our Resale segment experienced 2,411 and 4,494 cancellations, respectively, compared to 851 and 2,363 cancellations during the three and nine months ended September 30, 2023, respectively.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for making period-to-period comparisons of our business performance. See the “Adjusted EBITDA” section below for more information and a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure.

Current wording

Adjusted EBITDA is a non-GAAP financial measure. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for making period-to-period comparisons of our business performance. See the “Adjusted EBITDA” section below for more information and a reconciliation of Adjusted EBITDA to its most directly comparable US GAAP measure.

Previous wording

Marketplace GOV can be impacted by seasonality. Typically, we experience slightly increased activity in the fourth quarter when all major sports leagues are in season and there is an increase in order volume for theater events during the holiday season and concert on-sales for the following year. Quarterly fluctuations in Marketplace GOV can also result from the popularity and demand of performers, tours, teams and events, the length and team composition of sports playoff series and championship games, and the number of cancellations.

Current wording

Marketplace GOV can be impacted by seasonality. Quarterly fluctuations in Marketplace GOV can result from changes in event supply, the popularity and demand of performers, tours, teams and events, the mix of concert venue types among stadiums, arenas and amphitheaters, the length and team composition of sports playoff series and championship games, and the number of cancellations.

Previous wording

Marketplace GOV increased during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily as a result of an increase in Total Marketplace orders.

Current wording

Marketplace GOV decreased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily as a result of a decrease in average order size for concert events, including due to a shift in venue mix away from stadiums, and an increase in cancellations. Conversely, Marketplace GOV increased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily as a result of an increase in Total Marketplace orders.

Previous wording

Total Marketplace orders represents the volume of Marketplace segment orders placed on our platform in a period, net of cancellations that occurred during that period. An order can include one or more tickets, hotel rooms or parking passes. Total Marketplace orders allows us to monitor order volume and better identify trends within our Marketplace segment. Total Marketplace orders increased during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily as a result of an increase in the number of orders processed, which was due in part to the three and six months ended June 30, 2024 including orders processed through Vegas.com and Wavedash.

Current wording

Total Marketplace orders represents the volume of Marketplace segment orders placed on our platform in a period, net of cancellations that occurred during that period. An order can include one or more tickets, hotel rooms or parking passes. Total Marketplace orders allows us to monitor order volume and better identify trends within our Marketplace segment. Total Marketplace orders decreased during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily as a result of an increase in cancellations, partially offset by revenues from Vegas.com and Wavedash. Conversely, Total Marketplace orders increased during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily as a result of an increase in the number of orders processed, which was due in part to the nine months ended September 30, 2024 including orders processed through Vegas.com and Wavedash.

Previous wording

Total Resale orders represents the volume of Resale segment orders in a period, net of cancellations that occurred during that period. An order can include one or more tickets or parking passes. Total Resale orders allows us to monitor order volume and better identify trends within our Resale segment. Total Resale orders increased during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 primarily as a result of higher activity in our Resale segment.

Current wording

Total Resale orders represents the volume of Resale segment orders in a period, net of cancellations that occurred during that period. An order can include one or more tickets or parking passes. Total Resale orders allows us to monitor order volume and better identify trends within our Resale segment. Total Resale orders increased during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, primarily as a result of higher activity in our Resale segment.

Previous wording

Adjusted EBITDA is a key measure used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance and performing strategic planning and annual budgeting. Moreover, we believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for making period-to-period comparisons of our business performance and highlighting trends in our operating results.

Current wording

Adjusted EBITDA is a key measure used by our management team internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. Moreover, we believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for making period-to-period comparisons of our business performance and highlighting trends in our operating results.

Previous wording

Adjusted EBITDA is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. Adjusted EBITDA does not reflect all amounts associated with our operating results as determined in accordance with GAAP and may exclude recurring costs, such as interest expense – net, equity-based compensation, litigation, settlements and related costs, change in fair value of warrants, change in fair value of derivative assets and foreign currency revaluation (gains)/losses. In addition, other companies may calculate Adjusted EBITDA differently than we do, thereby limiting its usefulness as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from Adjusted EBITDA.

Current wording

Adjusted EBITDA is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with US GAAP. Adjusted EBITDA does not reflect all amounts associated with our operating results as determined in accordance with US GAAP and may exclude recurring costs, such as interest expense – net, equity-based compensation, litigation, settlements and related costs, change in fair value of warrants, change in fair value of derivative assets and foreign currency revaluation losses (gains). In addition, other companies may calculate Adjusted EBITDA differently than we do, thereby limiting its usefulness as a comparative tool. We compensate for these limitations by providing specific information regarding the US GAAP amounts excluded from Adjusted EBITDA.

Previous wording

The following table provides a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net income (loss) (in thousands):

Current wording

The following table provides a reconciliation of Adjusted EBITDA to its most directly comparable US GAAP measure, net income (in thousands):

Previous wording

We have historically incurred sales tax expense in jurisdictions where we expected to collect and remit indirect taxes, but were not yet collecting from customers. During the six months ended June 30, 2024, we accrued for additional sales and indirect tax liabilities in jurisdictions where we are not yet collecting from the customers and settled certain local admission tax liabilities for less than the amount that was accrued as of December 31, 2023.

Current wording

We have historically incurred sales tax expense in jurisdictions where we expected to collect and remit indirect taxes, but were not yet collecting from customers. During the three and nine months ended September 30, 2024, we accrued for additional sales and indirect tax liabilities in jurisdictions where we are not yet collecting from customers and settled certain local admission tax liabilities for less than the amount that was accrued as of December 31, 2023.

Previous wording

Relates to legal, accounting, tax and other professional fees; personnel-related costs, which consist of retention bonuses; integration costs; and other transaction-related expenses. Costs in the three and six months ended June 30, 2024 primarily related to the refinancing of the February 2022 First Lien Loan with the June 2024 First Lien Loan (each as defined herein), share repurchases, acquisitions and strategic investments. Costs in the three and six months ended June 30, 2023 primarily related to a secondary offering of our Class A common stock, acquisitions and strategic investments.

Current wording

Relates to legal, accounting, tax and other professional fees; personnel-related costs, which consist of retention bonuses; integration costs; and other transaction-related expenses. Costs in the three and nine months ended September 30, 2024 primarily related to the refinancing of the February 2022 First Lien Loan with the June 2024 First Lien Loan (each as defined herein), share repurchases, acquisitions and strategic investments. Costs in the three and nine months ended September 30, 2023 primarily related to a secondary offering of our Class A common stock, acquisitions and strategic investments.

Previous wording

Relates to the revaluation of warrants to purchase common units (“Intermediate Units”) of Hoya Intermediate, LLC (“Hoya Intermediate”) held by Hoya Topco, LLC (“Hoya Topco”) following the Merger Transaction.

Current wording

Relates to the revaluation of warrants to purchase common units (“Intermediate Units”) of Hoya Intermediate held by Hoya Topco, LLC (“Hoya Topco”) following the Merger Transaction.

Previous wording

Relates to unrealized foreign currency revaluation loss from the remeasurement of non-operating assets and liabilities denominated in non-functional currencies on the balance sheet date.

Current wording

Relates to unrealized foreign currency revaluation losses (gains) from the remeasurement of non-operating assets and liabilities denominated in non-functional currencies on the balance sheet date.

Previous wording

During the six months ended June 30, 2024, there were no material changes to the “Key Factors Affecting Our Performance” disclosed in our 2023 Form 10-K. Our financial position and results of operations depend to a significant extent on those factors.

Current wording

During the nine months ended September 30, 2024, there were no material changes to the “Key Factors Affecting Our Performance” disclosed in our 2023 Form 10-K. Our financial position and results of operations depend to a significant extent on those factors.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Total revenues increased $32.9 million, or 20%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $62.7 million, or 19%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase, which occurred in both our Marketplace and Resale segments, resulted primarily from an increase in orders processed, which was due in part to the three and six months ended June 30, 2024 including orders processed through Vegas.com and Wavedash.

Current wording

Total revenues decreased $1.5 million, or 1%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease, which occurred only in our Marketplace segment, resulted primarily from a decrease in average order size and an increase in cancellations, partially offset by revenue from Vegas.com and Wavedash. Total revenues increased $61.2 million, or 12%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase, which occurred in both our Marketplace and Resale segments, resulted primarily from an increase in orders processed, which was due in part to the nine months ended September 30, 2024 including orders processed through Vegas.com and Wavedash.

Previous wording

Marketplace revenues increased $30.9 million, or 22%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $54.3 million, or 20%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase resulted primarily from an increase in Total Marketplace orders.

Current wording

Marketplace revenues decreased $1.7 million, or 1%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease resulted primarily from a decrease in average order size for concert events, including due to a shift in venue mix away from stadiums, and an increase in cancellations. Marketplace revenues increased $52.6 million, or 12%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase resulted primarily from an increase in Total Marketplace orders.

Previous wording

Total Marketplace orders increased 0.5 million, or 18%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased 1.1 million, or 22%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase resulted primarily from an increase in the number of orders processed, particularly for theater events, which was due in part to the three and six months ended June 30, 2024 including orders processed through Vegas.com and Wavedash.

Current wording

Total Marketplace orders decreased 0.1 million, or 2%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease resulted primarily from an increase in cancellations, partially offset by orders from Vegas.com and Wavedash. Total marketplace orders increased 1.0 million, or 13%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase resulted primarily from an increase in the number of orders processed, particularly for theater events, which was due in part to the nine months ended September 30, 2024 including orders processed through Vegas.com and Wavedash.

Previous wording

The increase in Owned Properties revenues during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 resulted primarily from an increase in the number of orders processed, which was due in part to the three and six months ended June 30, 2024 including orders processed through Vegas.com and Wavedash.

Current wording

The increase in Owned Properties revenues during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 resulted primarily from an increase in the number of orders processed, which was due in part to the three and nine months ended September 30, 2024 including orders processed through Vegas.com and Wavedash.

Previous wording

The decrease in Private Label revenues during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 resulted primarily from the negative impact to revenue of decreased customer credit breakage.

Current wording

The decrease in Private Label revenues during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 resulted primarily from the negative impact to revenue of decreased customer credit breakage.

Previous wording

In our Marketplace segment, we also earn referral fee revenue by offering event ticket insurance to ticket buyers using a third-party insurance provider. Our referral fee revenue was $6.8 million and $13.6 million during the three and six months ended June 30, 2024, respectively, and $7.4 million and $14.6 million during the three and six months ended June 30, 2023, respectively. The decrease was primarily due to a decline in the insurance attachment rate to orders.

Current wording

In our Marketplace segment, we also earn referral fee revenue by offering event ticket insurance to ticket buyers using a third-party insurance provider. Our referral fee revenue was $6.0 million and $19.6 million during the three and nine months ended September 30, 2024, respectively, and $7.3 million and $21.9 million during the three and nine months ended September 30, 2023, respectively. The decrease was primarily due to a decline in the insurance attachment rate to orders.

Previous wording

Resale revenues increased $2.0 million, or 8%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $8.4 million, or 17%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase resulted primarily from an increase in Total Resale orders.

Current wording

Resale revenues increased $0.2 million, or 1%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $8.6 million, or 10%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase resulted primarily from an increase in Total Resale orders.

Previous wording

Total Resale orders increased less than 0.1 million, or 33%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased less than 0.1 million, or 23%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase resulted primarily from higher order volume.

Current wording

Total Resale orders increased less than 0.1 million, or 5%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased less than 0.1 million, or 16%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase resulted primarily from higher order volume.

Previous wording

Cancellation charges, which are classified as a reduction to revenues, negatively impacted Resale revenues by $0.5 million and $0.8 million for the three and six months ended June 30, 2024, respectively, compared to $0.2 million and $0.7 million for the three and six months ended June 30, 2023, respectively. The increase for both periods was due to a higher number of cancelled orders.

Current wording

Cancellation charges, which are classified as a reduction to revenues, negatively impacted Resale revenues by $0.3 million and $1.1 million for the three and nine months ended September 30, 2024, respectively, compared to $0.3 million and $1.0 million for the three and nine months ended September 30, 2023, respectively.

Previous wording

Total cost of revenues increased $6.2 million, or 14%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $18.0 million, or 22%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase resulted primarily from higher order volume in both our Marketplace and Resale segments.

Current wording

Total cost of revenues increased $0.6 million, or 1%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase resulted primarily from an increase in Total Resale orders. Total cost of revenues increased $18.5 million, or 14%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase resulted primarily from higher order volume in both our Marketplace and Resale segments.

Previous wording

Marketplace cost of revenues increased $2.4 million, or 11%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $8.5 million, or 20%, for the six months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was relatively consistent with the increase in Marketplace GOV, which increased by 5% and 12% during the same respective periods.

Current wording

Marketplace cost of revenues decreased $0.9 million, or 4%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $7.6 million, or 11%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The changes were relatively consistent with the changes in Marketplace GOV, which decreased by 13% and increased by 3% during the same respective periods.

Previous wording

Resale cost of revenues increased $3.8 million, or 19%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $9.5 million, or 25%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was not consistent with the increase in Resale revenues, which increased by 8% and 17% during the same respective periods, due to certain event categories with lower margins.

Current wording

Resale cost of revenues increased $1.4 million, or 5%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $10.9 million, or 17%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increases were not consistent with the increases in Resale revenues, which increased by 1% and 10% during the same respective periods, due to certain event categories with lower margins.

Previous wording

Marketing and selling expenses, which are entirely attributable to our Marketplace segment, increased $4.9 million, or 8%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $17.9 million, or 15%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase primarily resulted from greater spending on online advertising, which increased by $5.0 million, or 9%, during the three months ended June 30, 2024 compared to the three and six months ended June 30, 2023 and increased by $17.8 million, or 16%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in spending on online advertising was primarily driven by an increase in performance marketing channel spend to support growth, and was relatively consistent with the increase in Marketplace GOV, which increased by 5% and 12% during the same respective periods.

Current wording

Marketing and selling expenses, which are entirely attributable to our Marketplace segment, decreased $9.2 million, or 12%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease primarily resulted from a decrease in offline advertising. Marketing and selling expenses increased $8.7 million, or 4%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase primarily resulted from higher spending on online advertising, which increased by $15.1 million, or 9%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase in online advertising spending was primarily driven by an increase in performance marketing channel spend. The changes in Marketing and selling expenses were relatively consistent with the changes in Marketplace GOV, which decreased by 13% and increased by 3% during the same respective periods.

Previous wording

Total general and administrative expenses increased $22.8 million, or 59%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $32.7 million, or 46%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to higher personnel expenses from higher equity-based compensation expense, particularly Hoya Topco’s repurchase and cancellation (using its own funds) of all of its outstanding profits interests and phantom units held by our employees (as discussed in Note 18, Equity-Based Compensation, to our condensed consolidated financial statements included elsewhere in this Report), and higher employee headcount, including headcount added through our acquisitions of Vegas.com and Wavedash. Non-income tax expense increased as a result of accruing for sales and indirect taxes in jurisdictions where we believe it is probable we should remit but have not yet collected from customers. The increase in other expenses for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily driven by higher computer and telecom expenses and higher office expenses, including those related to our acquisitions of Vegas.com and Wavedash.

Current wording

Total general and administrative expenses increased $9.1 million, or 24%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $41.8 million, or 39%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to higher personnel expenses from higher equity-based compensation expense and higher employee headcount, including headcount added through our acquisitions of Vegas.com and Wavedash. The June 2024 repurchase and cancellation by Hoya Topco (using its own funds) of all of its outstanding profits interests and phantom units held by our employees also contributed to higher equity-based compensation expense during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 (for more information, see Note 18, Equity-Based Compensation, to our condensed consolidated financial statements included elsewhere in this Report). Non-income tax expense increased as a result of accruing for sales and indirect taxes in jurisdictions where we believe it is probable we should remit but have not yet collected from customers. The increase in other expenses for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 was primarily driven by higher computer, telecom and office expenses and higher professional service fees, including expenses and fees incurred by Vegas.com and Wavedash.

Previous wording

Depreciation and amortization expenses increased $7.8 million, or 288%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $15.7 million, or 296%, during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to the intangibles acquired as part of our acquisitions of Vegas.com and Wavedash and, to a lesser extent, an increase in capitalized development activities related to our platform.

Current wording

Depreciation and amortization expenses increased $7.4 million, or 223%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $23.1 million, or 268%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to the intangibles acquired as part of our acquisitions of Vegas.com and Wavedash and, to a lesser extent, an increase in capitalized development activities related to our platform.

Previous wording

Interest expense increased $2.6 million, or 92%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $4.4 million, or 72%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to lower interest income earned on cash balances.

Current wording

Interest expense – net increased $3.8 million, or 148%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $8.1 million, or 94%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to a higher amount of outstanding principal debt and lower interest income earned on cash balances.

Previous wording

Other expense increased $2.2 million, or 220%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $5.1 million, or 759%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to the due to the refinancing of the February 2022 First Lien Loan with the June 2024 First Lien Loan on June 14, 2024 and the fair value remeasurement of warrants, net of foreign currency revaluation losses due to unrealized gains arising from the remeasurement of non-operating assets and liabilities denominated in non-functional currencies on the balance sheet date.

Current wording

Other income increased $8.0 million, or 769%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $2.9 million, or 787%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to the fair value remeasurement of warrants and foreign currency revaluation gains.

Previous wording

Income tax expense increased $25.1 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and increased $27.1 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to the June 30, 2023 release of our previously recorded valuation allowance on our U.S. tax attributes carryforward deferred tax assets.

Current wording

Income tax expense increased $1.7 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and increased $28.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to the June 30, 2023 release of our previously recorded valuation allowance on our U.S. tax attributes carryforward deferred tax assets, which produced a sizable income tax benefit for the nine months ended September 30, 2023.

Previous wording

Our primary source of funds is cash generated from operations. Our existing cash and cash equivalents are sufficient to fund our liquidity needs for the next 12 months and thereafter for the foreseeable future. As of June 30, 2024, we had $234.3 million of cash and cash equivalents, which consist of interest-bearing deposit accounts, money market accounts managed by financial institutions and highly liquid investments with maturities of three months or less. For the six months ended June 30, 2024, we generated positive cash flows from our operating activities.

Current wording

Our primary source of funds is cash generated from operations. Our existing cash and cash equivalents are sufficient to fund our liquidity needs for the next 12 months and thereafter for the foreseeable future. As of September 30, 2024, we had $202.3 million of cash and cash equivalents, which consist of interest-bearing deposit accounts, money market accounts managed by financial institutions and highly liquid investments with maturities of three months or less. For the nine months ended September 30, 2024, we generated positive cash flows from our operating activities.

Previous wording

In June 2017, we entered into a $575.0 million first lien debt facility (the “June 2017 First Lien Term Loan”). We had an outstanding loan balance of $465.7 million under the June 2017 First Lien Loan as of December 31, 2021. In the first quarter of 2022, we repaid $190.7 million of the outstanding June 2017 First Lien Loan. On February 3, 2022, we entered into an amendment which refinanced the remaining balance of the June 2017 First Lien Loan with a $275.0 million term loan (the “February 2022 First Lien Loan”), added a $100.0 million revolving credit facility (the “Revolving Facility”) with a maturity date of February 3, 2027, replaced the London Interbank Offered Rate (“LIBOR”)-based floating interest rate with a term SOFR-based floating interest rate, and revised the springing financial covenant to require compliance with a first lien net leverage ratio when revolver borrowings exceed certain levels.

Current wording

In June 2017, we entered into a $575.0 million first lien debt facility (the “June 2017 First Lien Loan”). We had an outstanding loan balance of $465.7 million under the June 2017 First Lien Loan as of December 31, 2021. In February 2022, we repaid $190.7 million of the outstanding June 2017 First Lien Loan. In February 2022, we also entered into an amendment which refinanced the remaining balance of the June 2017 First Lien Loan with a $275.0 million term loan (the “February 2022 First Lien Loan”), added a $100.0 million revolving credit facility (the “Revolving Facility”) with a maturity date of February 3, 2027, replaced the London Interbank Offered Rate (“LIBOR”)-based floating interest rate with a term SOFR-based floating interest rate, and revised the springing financial covenant to require compliance with a first lien net leverage ratio when revolver borrowings exceed certain levels.