STUB Q2 Earnings Call Highlights

Key Points

• StubHub posted strong second-quarter growth: GMS rose 34% year over year to $3.1 billion, revenue increased 33% to $573 million, and adjusted EBITDA nearly doubled to approximately $106 million, lifting the margin to 18%.
• World Cup demand boosted results but increased costs: The event attracted buyers from more than 150 countries, while fulfillment, payment processing and customer-support investments temporarily pressured margins. Management expects profitability to improve as those costs subside.
• The company raised its full-year GMS outlook to $10.1 billion–$10.3 billion while maintaining adjusted EBITDA guidance of $400 million–$420 million. StubHub also reduced debt by $1.1 billion over the past year, bringing net leverage down to 3 times adjusted EBITDA.

StubHub NYSE: STUB reported second-quarter results marked by strong growth in gross merchandise sales, revenue and adjusted EBITDA, aided by demand for live events and the World Cup. Management also raised its full-year GMS outlook while maintaining its adjusted EBITDA forecast, citing a disciplined approach to the second half following the tournament’s concentrated demand.

Gross merchandise sales, or GMS, increased 34% year over year to $3.1 billion in the second quarter. Revenue rose 33% to $573 million, while adjusted EBITDA nearly doubled to approximately $106 million. Adjusted EBITDA margin expanded by nearly 600 basis points to 18%.

Chief Executive Officer Eric Baker said the quarter reflected healthy demand for sports, concerts, theater and other live entertainment, as well as the advantages of StubHub’s marketplace scale, liquidity and global reach.

World Cup Drives Demand and Operational Investment

The World Cup was the quarter’s standout event, according to Baker. More than 75 matches occurred over roughly two and a half weeks during the quarter, creating what he described as one of the industry’s largest and most dynamic ticketing environments.

Fans from more than 150 countries attended matches using tickets purchased through StubHub, and about one in seven World Cup tickets sold on the platform went to buyers outside the U.S. and Canada, Baker said. The company said the event demonstrated the global nature of its marketplace and its ability to connect international demand with available ticket supply.

However, the event’s complexity also led StubHub to increase spending on customer support and fulfillment. Baker said a small subset of orders encountered fulfillment issues, and the company invested to address them. He said StubHub’s goal is to eliminate such problems, acknowledging that refunds are an inadequate outcome for fans who miss an event.

Chief Financial Officer Connie James said World Cup-related costs affected profitability metrics during the quarter. GMS-to-revenue conversion was approximately 19%, roughly flat from the prior year, while gross margin was approximately 82%. James attributed the gross-margin result to the tournament’s effects on payment processing and fulfillment efficiency, along with incremental customer-experience investments.

Management said those costs were not representative of the company’s underlying margin structure. James said GMS-to-revenue conversion and gross margins had already improved in the weeks after the World Cup ended, with gross margin returning toward the company’s typical mid-80% range.

Marketing Efficiency Supports Margin Expansion

Sales and marketing expense represented 47% of second-quarter revenue, an improvement of approximately 800 basis points from a year earlier. James said the improvement reflected operating leverage from StubHub’s marketplace position and comparisons with a period of accelerated investment in 2025.

Operations and support costs held at approximately 3% of revenue, though they increased 32% year over year as the company continued customer-support spending. General and administrative expense increased by about 160 basis points as a percentage of revenue from the prior-year period, driven primarily by professional fees tied to the regulatory environment and legal matters. G&A expense improved sequentially by more than 200 basis points from the first quarter.

StubHub reported second-quarter net income of $14.6 million. James said the result included $69 million of stock-based compensation expense, as well as non-recurring items, foreign-exchange and derivative gains and losses, interest income and expense, and taxes.

The company generated approximately $598 million of trailing-12-month free cash flow, including a $418 million benefit from net inflows of buyer receipts and seller payments. Excluding those inflows and approximately $108 million of interest costs, underlying free cash flow was $288 million, representing 93% conversion of trailing-12-month adjusted EBITDA, James said.

Debt Reduction and Updated Outlook

StubHub ended the quarter with approximately $1.7 billion of cash and cash equivalents, or roughly $490 million net of seller payables. Net leverage fell to 3 times trailing-12-month adjusted EBITDA at June 30, compared with 4.5 times at the end of 2025.

After the quarter ended, StubHub repaid $100 million of its U.S. dollar term loan. The repayment followed a separate $100 million reduction in May and brought total debt repayment over the past 12 months to $1.1 billion, according to James. Gross debt was reduced to approximately $1.3 billion, with no maturities until March 2030.

The company raised full-year GMS guidance to $10.1 billion to $10.3 billion, representing growth of 10% to 12% year over year. Its prior outlook called for growth of 8% to 10%. StubHub maintained its full-year adjusted EBITDA outlook of $400 million to $420 million, including World Cup customer-support costs and regulatory advocacy expenses.

Management said it expects margin expansion in the second half as temporary World Cup-related expenses subside and sales-and-marketing efficiency continues. Still, Baker and James said the company is taking a cautious stance on GMS guidance because it is too early to determine whether the major World Cup spending period could affect consumer demand patterns for other live events later in the year.

Distribution, Advertising and Regulation

StubHub continued to expand its open-distribution efforts, which are intended to give rights holders nonexclusive access to its buyer base, distribution infrastructure and marketplace data. During the quarter, the company broadened self-service capabilities and category coverage, while adding partners including the American Athletic Conference and the NCAA.

The company is also developing StubHub Distribution Manager, an AI-powered self-service platform for venues and festivals to manage and distribute inventory. Baker said the initiative remains early, with current partners helping StubHub refine the product.

Advertising, particularly sponsored listings, is another developing revenue opportunity. James said StubHub still expects advertising to generate revenue in the tens of millions of dollars for the full year. Baker said the company is testing auction mechanics, pricing, conversion and user experience before broadly expanding the offering.

On regulation, Baker said StubHub believes resale markets remain broadly supported across jurisdictions. He said the company estimates that high-demand concert ticket sales by resellers at prices substantially above original prices accounted for approximately 10% of its global GMS in 2025. He noted that recently passed Washington, D.C., legislation expected to take effect in 2027 excludes sporting events, while proposed price caps in other jurisdictions did not advance during recent legislative sessions.

About STUB (NYSE:STUB)

Stubhub Holdings Inc, through its subsidiaries, provides an online marketplace to buy and sell tickets for sports, concerts, theater, festivals and other live events. Stubhub Holdings Inc is based in NEW YORK.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source