Vivid Seats Q3 2026 Earnings Call Transcript

Quartr
Provided by Quartr
November 9, 2026

Key Takeaways

  • Positive Sentiment: Vivid Seats reached an agreement in principle with a substantial majority of term-loan lenders on a recapitalization that would reduce total debt by more than $200 million, add $60 million of capital and extend maturities. The transaction remains subject to customary conditions, and executives said further details are forthcoming.
  • Positive Sentiment: Third-quarter marketplace GOV rose to $624 million from $618 million a year earlier, while adjusted EBITDA increased 81% to $9 million. The company reaffirmed its 2026 outlook of $2.3 billion–$2.6 billion in GOV and $34 million–$40 million in adjusted EBITDA.
  • Negative Sentiment: Management described recent on-sale activity as muted and said fourth-quarter outcomes depend heavily on the upcoming event calendar; it also cited softness in Las Vegas and Japan. For 2027, its baseline is mid-single-digit industry growth excluding the World Cup, but roughly flat to slightly down including it; a full MLB season cancellation could create a 5%–6% GOV headwind.
  • Positive Sentiment: The company said app share of GOV continues to increase year over year and that repeat and retention metrics are growing when excluding unusual World Cup-related summer behavior. It is continuing a transaction-funnel rebuild, with further loyalty initiatives expected in Q1, while keeping near-term spending focused on operating priorities rather than M&A.
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Earnings Conference Call
Vivid Seats Q3 2026
00:00 / 00:00

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Operator

Good day, and thank you for standing by. Welcome to the Vivid Seats third quarter 2026 earnings webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to speaker today, Austin Arnett, Vivid Seats General Counsel. Please go ahead.

Austin Arnett
Austin Arnett
General Counsel at Vivid Seats

Good morning, and welcome to Vivid Seats third quarter 2026 earnings call. I am Austin Arnett, Vivid Seats General Counsel. I am joined today by Larry Fey, Chief Executive Officer, and Joe Thomas, Chief Financial Officer. By now, everyone should have access to our earnings press release issued earlier this morning. The release, as well as supplemental earnings materials, are available on our investor relations website. Today's call will include forward-looking statements within the meaning of federal securities laws. These statements are subject to risks that could cause actual results to differ materially, including the risks discussed in today's earnings release and our periodic filings with the SEC.

Austin Arnett
Austin Arnett
General Counsel at Vivid Seats

Today's call will also include references to adjusted EBITDA, non-GAAP financial measure. To the extent reasonably available, a reconciliation of adjusted EBITDA to net income or loss, its most directly comparable GAAP financial measure, can be found in our earnings materials. I will turn the call over to Larry.

Larry Fey
Larry Fey
CEO at Vivid Seats

Good morning, everyone. Thank you for joining us today. Today marks a pivotal turning point for Vivid Seats as we enter our next chapter and work to unlock the full potential of our business. This morning, we announced we have reached an agreement in principle with the substantial majority of our term loan lenders on the material terms of a comprehensive recapitalization and expect to sign a formal transaction support agreement with those lenders shortly. The contemplated transaction will strengthen our balance sheet by substantially reducing debt and enhancing liquidity while extending debt maturities to provide the company a durable capital structure that will support long-term growth. Closing is subject to customary conditions, and we will update the market and provide further details as we progress.

Larry Fey
Larry Fey
CEO at Vivid Seats

We are equally excited to announce we returned to year-over-year growth in the third quarter, with $624 million of marketplace GOV and $9 million of adjusted EBITDA. These results reflect continued progress in executing our strategy with disciplined execution as we pursue long-term value creation. At the beginning of the year, we outlined a clear plan to strengthen our position by enhancing the buyer experience, deepening seller relationships, and improving operational efficiency. Three quarters in, we are encouraged by the measurable progress we have made thus far, and Joe will provide more details when discussing our financial results. Our focus this year has been on the core elements of our business. On the buyer side, we continue to advance our product roadmap with foundational enhancements designed to simplify event discovery, streamline the purchase experience, and drive stronger customer engagement.

Larry Fey
Larry Fey
CEO at Vivid Seats

We have made steady progress optimizing our core transaction funnel with key upgrades slated for deployment throughout the fourth quarter. We also continue to focus on delivering an exceptional customer experience with our Lowest Price Guarantee and Vivid Seats Rewards program at central elements supporting our differentiated value proposition. On the seller side, we remain focused on strengthening our industry-leading SkyBox platform and expanding the capabilities that help professional sellers operate efficiently. Following its initial rollout last quarter, our SkyBox broker-to-broker marketplace officially launched in Q3 to positive reception. We believe continued innovation across our SkyBox offering will support a vibrant seller ecosystem and strengthen seller engagement.

Larry Fey
Larry Fey
CEO at Vivid Seats

As we enter the final quarter of the year, our priorities remain unchanged: delivering differentiated value to buyers and sellers, strengthening our competitive position, and improving profitability. Our third-quarter performance demonstrates that our strategy is translating into measurable progress. With a return to growth and a reset capital structure, we look forward to launching Vivid Seats into a new era. We are eager to build on our momentum as we look to deliver even greater value to fans and partners. With that, I'll turn it over to Joe to walk through our financial results.

Joe Thomas
Joe Thomas
CFO at Vivid Seats

Thank you, Larry, and good morning, everyone. Our third-quarter finance performance reflects continued progress against our operating plan, highlighted by year-over-year growth in marketplace GOV and adjusted EBITDA. Third-quarter marketplace GOV was $624 million, up year-over-year compared to $618 million in the prior year period. This performance was driven by growth in our Vivid Seats properties and private label business, partially offset by softness in Las Vegas and Japan. Third-quarter adjusted EBITDA increased 81% year-over-year to $9 million, compared to $5 million in Q3 2025. This increase in adjusted EBITDA reflects our continued commitment to operating efficiency and financial discipline. In the past year, we have significantly reduced our fixed expenses and expect the reduction to provide lasting positive impact on our operating leverage.

Joe Thomas
Joe Thomas
CFO at Vivid Seats

As Larry mentioned, we have an agreement in principle with our term loan lenders. This comprehensive transaction will reduce our gross leverage by over $200 million through a debt-for-equity exchange, provide additional liquidity with $60 million of new capital, and meaningfully extend our debt maturities. We are excited about the positive impact this enhanced financial flexibility will have on our ability to accelerate our strategic growth initiatives. Turning to our guidance, we are reaffirming our 2026 outlook. We continue to expect marketplace GOV in the range of $2.3 billion-$2.6 billion, and adjusted EBITDA in the range of $34 million-$40 million.

Joe Thomas
Joe Thomas
CFO at Vivid Seats

As we look ahead, we remain focused on sustaining positive operating momentum, driving the cost efficiencies, and maintaining a disciplined approach to capital allocation. With our third quarter results, we have achieved a return to growth across GOV and adjusted EBITDA. We are confident in Vivid Seats' foundational advantages and remain committed to executing our long-term strategy to drive profitable growth in the coming quarters and years. I will now turn the call back to Larry for closing remarks.

Larry Fey
Larry Fey
CEO at Vivid Seats

Today's results mark the start of a new era for Vivid Seats. With the support of our stakeholders, we are well-positioned to execute on our long-term strategic priorities. We enter this new chapter with confidence in the strength of our platform, the value of our technology and data, and our ability to execute against the significant opportunities ahead. Operator, please open the call for questions.

Operator

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. In the interest of time, we ask that you please limit yourself to one question. Please stand by while we compile the Q&A roster. Our first question comes from Ryan Sigdahl with Craig-Hallum Capital Group. Your line is open.

Ryan Sigdahl
Ryan Sigdahl
Analyst at Craig-Hallum Capital Group

Hey, Larry, Joe. Good morning. I want to start with the recapitalization. Just curious what other options were considered. While I'm sure you can't discuss exact terms, it does feel like it's going to be very, very dilutive from an equity standpoint, which might have been the only option on the table. Just any other kind of details you can or are able to share there. Secondly, from a balance sheet standpoint, accounts payable meaningfully reduced this quarter despite not a similar change, I guess, from a GOV standpoint. So, curious if that's expected to reverse in Q4, if that was part of kind of the restructuring to get that paid down, but just from an AP standpoint.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah. Thanks, Ryan. I'll take them in reverse order. On accounts payable, as I think folks know, that often moves in opposite direction of our cash balance. When you roll forward from Q2 to Q3, I'm sorry, in tandem with our cash balance, same direction. The two major drivers, World Cup drove a significant amount of volume into the end of the second quarter, with many of those transactions residing in both cash and accounts payable as the second quarter ended. Obviously, the World Cup has now ended, and those amounts have been paid out. So that was a significant piece.

Larry Fey
Larry Fey
CEO at Vivid Seats

The second part, we pay our sellers once per week on Wednesdays. So when a quarter ends on a Tuesday, you get kind of peak weekly cash. When a quarter ends on a Wednesday, you get trough weekly cash. Q3 ended on a Wednesday. That accounts for a majority of the change in both the cash and accounts payable balance that you saw. In terms of the broader transaction, yeah, I think as folks know, we've been in discussions with our lender group for a number of months. Implied in that is that numerous different approaches and structures were discussed and contemplated. Ultimately, need to find a path that works for the various constituencies collectively.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah, I think more details coming in the coming days that'll kind of illuminate how everyone came to view this as a compelling and exciting path for everybody. But it's safe to assume that many paths were examined exhaustively over the prior six months.

Ryan Sigdahl
Ryan Sigdahl
Analyst at Craig-Hallum Capital Group

Thanks, Larry. Just onto the business. Live Nation called out good on-sales in Q3. Any comments on that? Potential read-throughs into 2027. If you're willing to, I know a lot of things going on in the business, but if you're willing to share any kind of outlook from an industry standpoint or even just high level from as we think about into 2027.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah, saw their announcements. I think our perspective on what we've seen as we approach kind of peak on-sale season and setting the stage for 2027 has been a little more mixed than that commentary. Saw some nice announcements in September and into early October. It's been quite quiet back half of October and first week of November, almost to the point of being a clear outlier to how quiet it's been. As we always say, they know better than us what's coming next, so we tend to defer to their confidence. But if you were to tell me just based on observed on-sales September through today, I would say it feels fairly muted.

Larry Fey
Larry Fey
CEO at Vivid Seats

As we look into 2027, I think our base case has been and remains, despite some hesitation given the on-sale calendar to date, that on an ex-World Cup basis, the industry will grow mid-single digits. Then on an inclusive of World Cup basis, closer to flat, maybe down a smidge given the outsized performance we saw at World Cup.

Ryan Sigdahl
Ryan Sigdahl
Analyst at Craig-Hallum Capital Group

Thanks, Larry. Look forward to more on the recap. Good luck, guys.

Larry Fey
Larry Fey
CEO at Vivid Seats

Thanks, Ryan.

Operator

Thank you. Our next question comes from Thomas Forte with Maxim Group LLC. Your line is open.

Thomas Forte
Analyst at Maxim Group LLC

Great, thanks. Congratulations on the recap, Larry and Joe. I'll limit myself to one question. Muse has taken off from a download standpoint. Larry, would appreciate your thoughts on agentic commerce and if you're seeing any indication that it's being used for your category.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah. We all downloaded Muse, and we all tried to use it to buy tickets. Similar to a refrain you've heard from us a few times, it's not there yet. It's not to say it won't get there, but we are not seeing substantial traffic through personal agents. We are seeing even fewer transactions, and then when you use it yourself, you kind of understand why. Especially for categories with dynamic inventory where a lot of personal preference is required, shopping's part of the experience. I think there's just a longer path. I think Airbnb spoke to it directly and said it pretty well. It's one thing to buy a pack of batteries. It's another thing, in their case, where you're looking at 20 different options on where to stay and looking at 25 pictures for each.

Larry Fey
Larry Fey
CEO at Vivid Seats

It's a very immersive experience, and frankly, the experience of the search is part of the process that resonates with people. Our experience is a little bit different, but probably more similar than not. People want to consider the different days, the different prices, the different sections, the different views. To fully outsource something as personal as how are you going to experience a meaningful entertainment event, I think is going to be further down the adoption curve.

Thomas Forte
Analyst at Maxim Group LLC

Thank you, Larry.

Operator

Thank you. Our next question comes from Cameron Mansson-Perrone with Morgan Stanley. Your line is open.

Cameron Mansson-Perrone
Cameron Mansson-Perrone
Analyst at Morgan Stanley

Thanks. Morning. Larry, on the guide, you touched a little bit on this maybe earlier, in terms of the on-sale activity. But the updated guide or reiterated guide implies a fairly wide dispersion in outcomes for the fourth quarter, particularly on the GOV side. Any color you can provide there on the lower and upper bound outcomes and what factors are playing a role in each of those scenarios or outcomes?

Cameron Mansson-Perrone
Cameron Mansson-Perrone
Analyst at Morgan Stanley

Separately, some focus as we approach here over the next month, the end of the MLB CBA, just any color that you would give in terms of update on sizing, how much baseball activity contributes to GOV for you guys. Or if you do not want to get that specific, anything on kind of general league exposure as we try to think through or contextualize that situation within your overall sports GOV would be helpful. Thanks.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah. Thanks, Cameron. I think the range of outcomes from here is almost entirely indexed to what the on-sale calendar looks like, with a non-negligible dash of competitor and competitive landscape considerations against what that backdrop looks like. You can get some multiplicative effects. What we have seen sometimes is when there is sparse announcements relative to expectations, perhaps counter to intuition, people actually get a little more aggressive and put a little more pressure on the limited economics to be had. So you can get a little bit of amplification. Given the relative uncertainty as we sit here around what the next six, seven weeks will bring in terms of on-sales, wanted to give ourselves a correspondingly broad aperture. As we think about next year risks with MLB, I think of MLB as mid-single digits of full year GOV.

Larry Fey
Larry Fey
CEO at Vivid Seats

Within that, you would be right to assume that the spring contribution is less than the peak summer contribution, which is less than the playoff contribution. As you think about cases, if there were to just be no season at all, 5%-6% of GOV headwinds is probably a reasonable starting point. There are a number of scenarios contemplated, but if you assume there is, say, a third of the season that goes away, but it is the first third, I think you could assume slightly less than a third of that number in terms of the headwinds.

Cameron Mansson-Perrone
Cameron Mansson-Perrone
Analyst at Morgan Stanley

That is helpful. Thanks.

Operator

Thank you. Our next question comes from Dan Kurnos with StoneX. Your line is open.

Dan Kurnos
Analyst at StoneX

Yeah. Great, thanks. Good morning. Congrats on the recap, guys. I guess just, I know you said we are going to get more color on that. Can you just be clear, though, is the $200 million of less funded debt, is that net of the new money?

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah. If you take the total debt when this is all done compared to the total debt before the transaction, the pro forma number will be $200 million less.

Dan Kurnos
Analyst at StoneX

Okay, perfect. Then one more housekeeping before I ask a more tactical question. Just on the World Cup tailwind, I know you've sized it generically over the two quarters. Can you give us a sense of how big it was in July? Obviously, there were bigger games, so any sense of how much it was in Q3?

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah, as you noted, it was sort of the culmination of the playoff bracket. So fewer games, higher profile games, higher AOS, albeit not to the level of dispersion we would have anticipated coming in. It was about $2 million of EBITDA in July.

Dan Kurnos
Analyst at StoneX

Got it. Then, I guess, Larry, you've made a big point of pushing everything into the app. I do not know if you could give us an update on repeat rates, what it looks like, how that initiative is going, and given sort of the landscape, and now that you have the recap behind you, are there other actions you guys are going I am sure that took a little bit of your time, so are there other actions you guys are contemplating to kind of continue forging ahead from here?

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah. Thanks, Dan. That got a little chuckle out of the group. I think as we approach and now actually lap the one-year mark of first rolling out our app initiative, it has been a wonderful success. As you start to lap initial deployment, obviously the bar goes up to continue delivering compounded gains. I think we had said at the outset our ambitions were to, in the near term, continue to have app share as a GOV increase, and then over the longer term, get it to where the majority of the business transacts on the app. We have not yet achieved the latter, but we continue to trend well on the former, in terms of continuing to deliver higher share year-over-year on the app.

Larry Fey
Larry Fey
CEO at Vivid Seats

When you look at the fundamental economics that we are seeing in the app, continuing to refine and drive incremental improvements, there is always a balance between volume and contribution, and we are finding a really nice balance there where we are seeing profitable growth. So more volume, more profitable. On the retention, that is ultimately the benchmark on if our collective efforts to keep customers coming back because they are enjoying their experience with us, that is the scoreboard.

Larry Fey
Larry Fey
CEO at Vivid Seats

We actually saw some distortion throughout the summer, which time will confirm, but we think was a lot of World Cup traffic and behavior that was different from typical. So we have seen the September cohort normalize. Do not want to declare victory just yet, but if you ignore those World Cup months, it looks like we continue to have nice growth year-over-year in all of our retention and repeat metrics.

Larry Fey
Larry Fey
CEO at Vivid Seats

All of that said, so where do we go from here? We are actively developing kind of the next phase of kind of reasons to come to the app. I think of it as a kind of refreshed and revamped take on our loyalty program. So more expansive with the ultimate objective being, how do you give win-win reasons for folks to come back to your app, maintain connectivity so they keep it on their phone? One of the challenges in a low-frequency category, if you are only buying once every six months, we need to give you a compelling reason just to keep awareness and not delete the app and then start the whole process over six months later. We got some exciting sticks in that fire.

Larry Fey
Larry Fey
CEO at Vivid Seats

From a timing standpoint, expect probably Q1 deployment of that initiative. It will be more of a framework and kind of ongoing indefinite opportunity to offer different items to customers and test and iterate on what works most effectively. Think of that app journey as one that we are pleased with our progress in year one. Plenty more to come.

Dan Kurnos
Analyst at StoneX

Awesome. Thanks for all the color, Larry. Appreciate it.

Larry Fey
Larry Fey
CEO at Vivid Seats

Thanks, Dan.

Operator

Thank you. Our next question comes from Andrew Marok with Raymond James. Your line is open.

Andrew Marok
Andrew Marok
Analyst at Raymond James

Hi. Thanks for taking my questions. Two if I could, please. The first, it's on every TV commercial we've ever seen over the past two months or so, these kind of concerns around consumer affordability. Just wondering how that is trending into your business from a demand standpoint, how our AOS is holding up as a result of any shakiness in the consumer. Then maybe a second question on the World Cup and the follow-through. I think some of your competitors maybe had some higher profile missteps in terms of customer service and experience and things like that, where you guys had much less of that. I know in the past you've kind of called out that it can take a while for a customer to repeat because these are not necessarily the most frequent purchases.

Andrew Marok
Andrew Marok
Analyst at Raymond James

But with that goodwill, I think, that you've earned with consumers coming out of the World Cup, does that represent an opportunity for 2027 to be able to monetize those customers? Thanks.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah. Thanks, Andrew. Starting with the consumer health, I think on the Vivid Seats properties, we have continued to see what I would characterize as continued health. When we see ebbs and flows, it is primarily tied to the underlying event calendar. The World Cup is the low-hanging fruit in that example, where it is a huge event, high prices, and stadiums overflowing.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah, I think on the flip side, while the World Series and the run from a small market team was probably fun for the diehard baseball fans, it is probably not ideal from a ticketing standpoint. Not necessarily because people suddenly weren't able to buy baseball tickets, but Tampa fan base just isn't as deep and passionate as the Yankees fan base. So I think that has been broadly our observation on the Vivid Seats properties. I would contrast that with Vegas.

Larry Fey
Larry Fey
CEO at Vivid Seats

Where we are indexed, just given the nature of the shows and the tickets we sell, to a full spectrum of customers. You will hear, and we have seen a number of Vegas operators talk about some pressure overall to Vegas traffic. In particular, within that, you have a bit of two different stories happening in parallel, where the high-end consumer is hanging in there, and the lower-end consumer has been under moderate, if not approaching severe pressure, at least specific to Vegas. So we have seen that come through in the data.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah, I think it is likely one part underlying pressure on the lower-end consumer, and one part the Vegas value proposition needing a little bit of a refresh. So you are seeing a number of Vegas shows either get canceled and going to be replaced, getting refreshed, reimagined. I think that new content slate will line up well.

Larry Fey
Larry Fey
CEO at Vivid Seats

A lot of chatter around the $15 waters and some of the value propositions that have become detached from Vegas' historical allure and appeal. That is the area where we have really seen it and where we will look for improvement on a cyclical basis as we head into 2027. On the customer experience side, I think that is, you nailed what we think is a great opportunity, also a threshold obligation. I will say as a user myself, if I need to interact with customer service, it is probably not a great sign, right? I expect friction-free, no-touch transactions, whether that is buying something on Amazon or calling your Uber.

Larry Fey
Larry Fey
CEO at Vivid Seats

If you are talking to customer service, something went wrong. So that is our ultimate ambition, to avoid customers having to interact at all. But if they do, you take care of folks because things do go wrong.

Larry Fey
Larry Fey
CEO at Vivid Seats

I don't think we'll ever get to 100.0%, but make people feel like they've been treated the right way. There's initiatives afoot on both of those. I think, as you noted, we feel like we handled ourselves exceptionally well with the World Cup. That should pay dividends. But there's continued opportunity to remove friction from this space. As we look at our initiatives as we head into 2027, removing that friction and reducing the need for customers to contact us is actually one of our top priorities.

Andrew Marok
Andrew Marok
Analyst at Raymond James

Great. Thank you very much.

Operator

Thank you. Our next question comes from Ralph Schackart with William Blair. Your line is open.

Ralph Schackart
Ralph Schackart
Analyst at William Blair

Larry, thanks. Thanks for the question. Larry, maybe sort of continuing your last thoughts about removing friction from the process. You've talked about this historically, but maybe frame one or two initiatives in terms of how you're doing this and how you're focused on it. Also, I think somewhere in the prepared remarks, you talked about an upgrade in the transaction funnel. I believe you might have said Q4. Just an update on this or color and what you're looking to achieve there. Thank you.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah. So on the friction side, a significant number of our contacts are anxiety around, "Where are my tickets? When do I get my tickets?" If I were to contrast where I think we can get to versus where we are, I'd point to perhaps the airlines. Everybody just knows you get your boarding pass 24 hours before. You're going to have to download the United app to get it. As a result, I don't think people freak out when three days before the flight, they don't have their boarding pass. I give them credit for having made that expectation clear and consistently enforced. I'm sure they get some, for first-time flyers, "Where's my ticket?" As a general user base, I think people are very familiar with how and when to receive their ticket.

Larry Fey
Larry Fey
CEO at Vivid Seats

For numerous reasons, I think our space has some unique complications around how to get tickets fulfilled, when they're fulfilled, the need to sometimes download a second app, usually Ticketmaster, to get those tickets, which just introduces all of the baseline plus some incremental customer anxiety. Through better messaging, better follow-up, better verification and validation that people, when the tickets are sent, have downloaded them, that they can locate them right away, do that as quickly as possible to avoid the need for a panicked follow-up eight minutes before the show starts, at which point things can get out of hand quickly.

Larry Fey
Larry Fey
CEO at Vivid Seats

That would be the thematic focus, right? Give people the tickets in a quick, efficient, stress-free way with as much distance from the event start as possible. On the customer funnel, multi-dimensional in terms of what we've been pushing through. The way we've come at it, almost think of starting at the end of the funnel and moving your way backwards.

Larry Fey
Larry Fey
CEO at Vivid Seats

So, our thought was if you have a leaky bucket, if you press buy and for whatever reason the transaction doesn't go through, your authorization rates aren't correct, you've got, "Oh, I mistyped the ZIP code," but we don't tell you that you mistyped the ZIP code, so you just give up out of frustration. What you do before you get to that point, kind of moot. You need the end of the funnel to be tight. The next step is your checkout process. Before that, you use your seat maps to select your listings. Before that, you use performer or venue pages to figure out which event or which day you want to select. So that's kind of the end-to-beginning path.

Larry Fey
Larry Fey
CEO at Vivid Seats

A lot of improvements on the payment and authorization front that have been flowing through the numbers throughout the year. If folks are paying close attention, you'll see that what used to be a four-step checkout is now one step. Now we're moving into the, call it, find the right seat at the right price base, and that'll be multi-dimensional. The way we present our maps, the inventory we show, the way we score it, all of that is being refreshed in real time, and then we'll turn attention to the preceding step. If you land on, let's say you want to go to a show at the Sphere. Well, there's the everyday Wizard of Oz option, going to be Rocky Horror.

Larry Fey
Larry Fey
CEO at Vivid Seats

There is also the one-off concerts, and there is a lot if you say, "I want to go to the Sphere to consume," and how do you most thoughtfully and efficiently present those choices to get customers to the proper next step? We look forward to, call it sometime in Q1, be able to step back and say we completed the end-to-end product rebuild. I think quite the analogy we are using on our side is a home renovation, where you have an old house, you redo the kitchen. When you finish the kitchen, you now have an old house with a new kitchen. Then you do the bathrooms, then you do the family room.

Larry Fey
Larry Fey
CEO at Vivid Seats

At some point, you have a new house. We are in the middle of that journey, and excited to kind of hit that tipping point during Q1.

Ralph Schackart
Ralph Schackart
Analyst at William Blair

Great. Thanks, Larry.

Operator

Thank you. Our next question comes from Khadijah Gibson with RBC Capital Markets. Your line is open.

Khadijah Gibson
Khadijah Gibson
Analyst at RBC Capital Markets

Thanks. Good morning, guys. This is Khadijah on for Brad Erickson. A couple for me, if I may. The first one is on just a recap. Once it closes and you guys are operating with a healthier balance sheet, how should we think about the priority stack for capital deployment? Is the focus purely on reinvesting in the business, or does the extended maturity and lower debt service open the door to more offensive moves like M&A? Secondly, with S&M down 11% year-over-year and GOV growing, can you help us understand how much of the order volume decline is a deliberate pullback in lower ROI spend versus organic demand softness, and how should we think about that line going forward? Thanks.

Larry Fey
Larry Fey
CEO at Vivid Seats

Yeah, thanks. I think in the I will start with capital deployment. Obviously, very excited to get back to having a fully durable capital structure, which I think over time will open up the full spectrum of opportunities. But in the near term, it is going to be head-down, operating-centric. So we have got a number of initiatives that they are all funded within our budget in our existing capital plan, so it would not bridge into the realm of capital allocation. But we think exciting growth opportunities from our continued product enhancement.

Larry Fey
Larry Fey
CEO at Vivid Seats

Some of the things that get us really excited about the product rebuild that we have talked about, we are doing that in a way where the improvements to your checkout, the improvements to your seat maps, those will apply in the U.S., they would apply internationally. And if you build it properly, they can be extended to some of your private label partners.

Larry Fey
Larry Fey
CEO at Vivid Seats

We started with some of these initiatives that will be extensible, and what we get very excited about heading into next year is with the kind of rebuilt approach and deployment concept, redoubling our efforts on international growth, reinvigorating pipeline pursuit across our private label business, and get maximum bang for the buck on the product refresh and rebuild that we have been doing. And if we are successful in executing against that, I think that is the path to opening up kind of the right to pursue M&A, whether it is small-scale tuck-ins or something more meaningful. On the sales and marketing, I think you nailed one of the core elements of our approach. The paid search portion of this industry has been and remains very competitive. We see oscillations from our largest competitor.

Larry Fey
Larry Fey
CEO at Vivid Seats

We have seen continued increase from the relatively new entrant, and that has continued to put pressure on the paid search channel. It is sort of the flip side of our app-centric approach. The majority of new customers do come through paid search, so I think you need to continue to play in that space, but doing so prudently and doing a better job of retaining folks once you acquire them through that quite expensive channel is core to building sustainable enterprise value. But what you are seeing is a correct assessment. We have pulled back on our unit economic spend in the paid search channel with a view on making sure it is kind of sustainable economics that would pass any corporate finance textbooks evaluation of what is prudent.

Operator

Thank you. This concludes the question and answer session and today's conference call. Thank you for participating. You may now disconnect.

Executives
    • Austin Arnett
      Austin Arnett
      General Counsel
    • Larry Fey
      Larry Fey
      CEO
    • Joe Thomas
      Joe Thomas
      CFO
Analysts
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