Vivid Seat Inc’s (SEAT) continues to face pressure from a weaker secondary ticketing marketplace, with competitive intensity, lower conversion and softer event-demand trends. In response to the earnings deterioration, SEAT implemented significant cost-reduction measures, initially targeting USD 25m of annualized savings in August 2025 before increasing the target to USD 60m in November 2025. These actions are visible in 1Q26 results, with marketing and selling expense declining 22% YoY to USD 50m from USD 64m, while G&A expense fell 31% YoY to USD 33m from USD 48m. However, the savings were more than offset by weaker marketplace activity and margin pressure, as gross profit declined 28% YoY to USD 87m from USD 119m, and adjusted EBITDA fell 56% YoY to USD 9m from USD 22m. As a result, net leverage increased to 8.3x compared to 1.4x in 1Q25.

The elevated leverage and weaker earnings led the company to explore a recapitalization transaction with an ad-hoc lender group, but talks failed after the parties remained far apart on creditor economics and equity value allocation. Lenders proposed a USD 50m equity rights offering, a reduced USD 75m revolver and a USD 225m takeback term loan at SOFR + 650bps with a two-year maturity extension, while SEAT countered with an exchange of existing term loans into a second-out facility at 77.5 cents, a lower SOFR+ 225bps coupon and only 12.5% of common equity for lenders (see below chart for additional details).

Against this backdrop of weaker earnings, elevated leverage and failed recapitalization talks, the first-lien term loan traded down to 45.8 on 20 July 2026 and yielding roughly 43.1%.

Liquidity and covenant

SEAT’s liquidity remains adequate for now, but it has weakened meaningfully to USD 175m in 1Q26 from USD 233m a year ago, reflecting lower cash balances and reduced revolver access. Cash was down 28% YoY to USD 144m from USD 199m, reflecting the cumulative impact of weaker operating performance leading to a cash burn over the past year, even as 1Q26 cash flow benefited from favorable working-capital timing.

The company’s USD 100m revolving credit facility is subject to a springing first-lien leverage covenant of 7x. Based on estimated NTM EBITDA of USD 37m, SEAT is projected to exceed this threshold, effectively limiting revolver availability to 35% of commitments. We estimate liquidity may decline to roughly USD 136m by March 2027, implying a USD 39m reduction over the next 12 months.

Financial performance

In 1Q26, revenue declined 23% YoY to USD 126m, due to weaker marketplace activity, lower traffic conversion and softer discretionary event demand. Revenue has been consistently declining for the last five quarters at an average of 26% YoY.

Gross margin contracted 402bps YoY to 68.8% in 1Q26, reflecting increased promotional activity, an unfavorable merchandise mix and a weaker fixed-cost absorption on lower sales volume. This reflected in adjusted EBITDA which declined 56% YoY to USD 9m, while margin contracted 570bps to 7.5%, as revenue and gross profit pressure more than offset cost savings.

In 1Q26, reported FCF improved to USD 43m from a USD 32m outflow in 1Q25, driven by a working-capital-led swing in operating cash flow to USD 46m (1Q25: cash burn of  USD 25m) and lower capex of USD 3m (1Q25: USD 7m).

Management’s FY26 outlook assumes a 2H26 recovery, but full-year guidance still implies that earnings remain below FY25 levels. The company projects FY26 revenue of USD 535m (down 6% YoY from USD 571m), Marketplace GOV (represents total value of tickets sold) of USD 2.2bn–USD 2.6bn (down 19% YoY from USD 2.70bn) and adjusted EBITDA of USD 30m–USD 40m (an expected decline of 16% YoY from the mid-point), alongside unlevered free cash flow of USD 20m.

For FY27, management expects the recovery to continue, with Marketplace GOV of USD 2.65bn (up 10% versus the FY26 midpoint, but still slightly below FY25), revenue of USD 575m (up 7% YoY and broadly flat versus FY25) and adjusted EBITDA of USD 45m (up 29% versus the FY26 midpoint and 8% above FY25). Unlevered free cash flow is expected to improve to USD 35m (up 75% YoY from FY26 guidance).

We view management’s 2026 guidance as achievable but is dependent upon execution what else would it be dependent on, based on a weak start for 2026 as marketplace GOV declined 25% YoY to USD 612m, revenue was down 23% to USD 126m and adjusted EBITDA declined 56% to USD 9m. This indicates that the anticipated recovery is yet to materialize, and for the next nine months of 2026 (2Q, 3Q and 4Q) revenue growth has to be flat or marginally up. Achieving USD 35m EBITDA midpoint needs the company to generate USD 26m of EBITDA in the next 9M26 which seems achievable based on ongoing cost reductions. However, GOV revenue of USD 2.6bn and EBITDA of USD 40m (upper end) would require a pronounced 2H26 recovery, driven by higher app penetration, improved customer engagement, private-label partnerships and product. FY27 guidance seems aggressive and requires the 2H26 stabilization to translate into sustained top-line and earnings growth during FY27. While product improvements, growing app penetration, rewards and pricing initiatives, private-label partnerships and cost savings could support recovery, however, we believe these initiatives may have limited ability to fully offset persistent demand weakness and competitive pressures, leaving downside risk to the FY27 outlook if the anticipated 2H26 recovery is delayed or proves less durable than management expects.

Valuation

SEAT trades at an EV/NTME EBITDA multiple of 8.8x lower compared to its closest, and a much bigger peer StubHub Holdings which trades at 9.2x. Moreover, it trades at a lower EBITDA margin of 6.9% compared to peer margin of 22%, due to its superior global presence , inventory depth, organic traffic and large network. SEAT’s net leverage on an NTM EBITDA basis stands elevated at 6.7x, compared to the excess cash of StubHub.

Tracking failed negotiations, refinancing risks and consistently weak operating performance, we value SEAT at a distressed 3x NTME EBITDA multiple. At that multiple, we expect first-lien recovery of approximately 60% in the low case, 63% in the base case and 66% in high case scenario.

The USD 391m term loan due 2029 last traded at 45.8 on 20 July, down 38 points YoY, yielding 43.1%. The company’s share price is down 79% YoY to USD 7.07/share as of 20 July 2026.

Business description and historical reference

Vivid Seat Inc (SEAT) operates a data‑driven secondary ticketing platform connecting professional sellers and consumers across sports, concerts, and theatre. Revenue is primarily generated through take‑rate fees on gross order value, supplemented by advertising and software services. The platform comprises VividSeats.com, its mobile app, and Vegas.com, alongside early‑stage expansion initiatives in Japan and Europe. Supply is sourced from professional brokers integrated via SEAT’s proprietary Skybox ERP suite, supporting inventory management and pricing transparency. Operations are organized into two segments: Marketplace (78% of 1Q26 revenue), an asset‑light transaction platform, and Resale (22%), which selectively acquires inventory and develops seller tools through Skybox.

In September 2025, Moody’s downgraded SEAT’s rating by two notch to Caa1, reflecting sustained competitive pressure, continued revenue decline, and sharply elevated leverage. While in October 2025 S&P lowered the company’s rating by one notch to B‑ with a negative outlook, citing prolonged earnings pressure, limited visibility on stabilization, and rising balance sheet stress.

Vivid Seats Inc 1Q26 Financial Excel

Vivid Seats Inc 1Q26 10-Q Filing 

Vivid Seats Inc 1Q26 Financial Results Press Release

Vivid Seats Inc 1Q26 Earnings Presentation

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