STUB Q1 Earnings Call Highlights
StubHub (NYSE:STUB) reported higher first-quarter revenue and profitability as management said the ticket marketplace is benefiting from scale, marketing efficiency and healthy demand for live events.
On the company’s first-quarter 2026 earnings call, Founder, Chairman and Chief Executive Officer Eric Baker said gross merchandise sales, or GMS, rose 7% year over year to $2.2 billion, while adjusted EBITDA margin expanded to 16%. Baker said StubHub also generated “healthy cash flow,” allowing the company to reduce leverage and strengthen its balance sheet.
“We’re off to a positive start in 2026 with solid top-line growth and increased profitability,” Baker said. He added that StubHub is reiterating its full-year outlook for GMS and adjusted EBITDA.
Revenue Outpaces GMS Growth
Chief Financial Officer Connie James said revenue increased 12% year over year to $446 million, outpacing the 7% increase in GMS. She attributed the performance to a normalization of GMS-to-revenue conversion as the company laps market share investments made in 2025.
James said StubHub expects conversion to return to more typical historical levels, “approaching 20% for the full year.” Gross margin was 85%, up approximately 100 basis points from the prior year, reflecting more efficient customer acquisition and servicing, as well as lower inventory costs.
Sales and marketing expense was approximately 50% of revenue, improving by 500 basis points year over year. Operations and support costs were about 3% of revenue. General and administrative expense increased as a percentage of revenue, which James said was primarily due to professional fees and payroll taxes tied to higher stock-based compensation following the company’s IPO. She said G should decrease as a percentage of revenue over the rest of the year as the business scales.
Adjusted EBITDA was $72.1 million, representing a 16% margin and an expansion of more than 400 basis points year over year. Net income for the quarter was $48 million.
Company Reiterates 2026 Outlook
StubHub reaffirmed its full-year 2026 guidance for GMS of $9.9 billion to $10.1 billion, representing year-over-year growth of 8% to 10%. The company also reiterated its adjusted EBITDA outlook of $400 million to $420 million.
James said the company guides on an annual basis because live events are seasonal and quarterly results can vary. She said the first-half and second-half contribution to full-year GMS should remain broadly consistent with 2025, with profitability expected to be somewhat more weighted toward the second half as the business scales.
In response to an analyst question about the World Cup, James described the event as a “tier one” opportunity for StubHub, with a more meaningful impact in the second and third quarters. However, she said it is “not comparable to Taylor Swift,” calling that event “a one of one.” She emphasized that StubHub is not dependent on any single event to meet its outlook.
Cash Flow and Deleveraging Remain Priorities
James said StubHub generated approximately $298 million of free cash flow on a trailing 12-month basis, representing 116% conversion of adjusted EBITDA. Excluding net buyer receipt and seller payment inflows, as well as interest costs, underlying free cash flow was approximately $234 million, or 91% of trailing 12-month adjusted EBITDA.
The company ended the quarter with approximately $1.5 billion in cash and cash equivalents, or $508 million net of seller obligations. Net leverage improved to approximately 4 times trailing adjusted EBITDA, down from 4.5 times at the end of 2025.
Subsequent to quarter end, StubHub repaid $100 million of its U.S. dollar term loan. James said total debt repayment over the last 12 months now exceeds $1 billion, leaving the company with approximately $1.4 billion of outstanding debt and no maturities until March 2030.
James also said $314 million of preferred equity converted into approximately 16 million shares of Class A common stock during the first quarter, resulting in 374 million common shares outstanding at quarter end. In May, the company granted approximately 13 million restricted stock units under its employee incentive plan.
Marketplace Scale and International Growth
Baker said StubHub’s three priorities for 2026 are growth in its core resale marketplace, increased profitability and progress on longer-term distribution opportunities. He said the first quarter showed execution against all three.
Management said live events and the secondary ticketing markets remain healthy, supported by strong consumer demand and a robust 2026 event calendar. James said international growth outpaced North America, with “noteworthy performance” in Latin America and Asia Pacific.
Asked about macroeconomic pressure and whether fans are trading down, Baker said StubHub has not seen any impact. He said live events have historically been resilient across economic cycles, with the exception of COVID-related disruption, and noted that roughly half of tickets on StubHub trade for less than $100.
“Fans are passionate about live events,” Baker said. “It’s always been something that’s grown through thick and thin.”
Open Distribution, AI and Advertising in Focus
Baker spent much of the call discussing StubHub’s push toward what the company calls non-exclusive Open Distribution, which allows content rights holders such as teams, artists, venues and event organizers to list inventory across more channels.
During the first quarter, StubHub announced Distribution Manager, an AI-powered self-serve tool designed to let artists, teams and venues list and manage tickets directly through StubHub without complex integration. Baker said the tool uses StubHub marketplace data to provide real-time pricing and demand signals before tickets go live.
The company also highlighted direct integrations with primary ticketing platforms, including an integration with a primary ticketing company serving rights holders such as Stanford University Athletics. Baker said these integrations are intended to let organizers activate StubHub as an additional distribution channel from existing systems.
StubHub is also testing advertising products, including sponsored-listing concepts. Baker said the company is focused on auction mechanics, pricing and ensuring advertising does not hurt conversion or the user experience. He declined to say when advertising may become material.
On artificial intelligence, Baker discussed StubHub’s integrations with Anthropic’s Claude and ChatGPT, which allow users to discover and browse live events. He said those channels are not currently material but reflect the company’s desire to meet consumers wherever they search for events in the future.
Management also addressed regulatory issues, including price-cap proposals in some jurisdictions and the broader antitrust environment in live event ticketing. Baker said StubHub’s outlook does not depend on any specific outcome from antitrust proceedings involving Live Nation and Ticketmaster, though he said developments that support more open distribution would be positive for consumers.
“Anything that pushes more towards Open Distribution, and is better for consumers, meaning more selection, more ease of multiple channels, non-exclusively, everything that we’ve talked about, that’s always positive,” Baker said.
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.
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