What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-12 compared with 2024-03-08 · 844 added, 805 removed, 691 unchanged (70% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

Consolidated Statements of Equity (Deficit)

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We have audited the accompanying consolidated balance sheets of Vivid Seats Inc.

and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 , in conformity with accounting principles generally accepted in the United States of America.

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We believe that our audits provide a reasonable basis for our opinion.

Emphasis of Matter

As discussed in Note 1 to the financial statements, the Company consummated a merger on October 18, 2021, which has been accounted for as a reverse recapitalization.

The financial statements of the Company represent a continuation of the financial statements of Hoya Intermediate, LLC.

/s/ Deloitte & Touche LLP

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Intangible assets – net

Deferred tax assets

Other non-current assets

Liabilities and equity (deficit)

Goodwill – net

Deferred tax assets – net

Liabilities, redeemable noncontrolling interests, and shareholders' equity

Current liabilities:

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Other liabilities

Total long-term liabilities

Total liabilities

Commitments and contingencies (Note 18)

Redeemable noncontrolling interests

Shareholders' equity (deficit)

Shareholders' equity:

Class A common stock, $ 0.0001 par value;

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Class B common stock, $ 0.0001 par value;

250,000,000 shares authorized, 76,225,000 and 118,200,000 shares issued and outstanding at December 31, 2023 and 2022, respectively

250,000,000 shares authorized, 76,225,000 shares issued and outstanding at December 31, 2024 and 2023, respectively

Additional paid-in capital

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Accumulated deficit

Accumulated other comprehensive income

Total Shareholders' equity (deficit)

Total liabilities, Redeemable noncontrolling interests, and Shareholders' equity (deficit)

Accumulated other comprehensive income (loss)

Total shareholders' equity

Total liabilities, redeemable noncontrolling interests, and shareholders' equity

The accompanying notes are an integral part of these financial statements.

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Change in fair value of contingent consideration

Total costs and expenses

Income from operations

Other (income) expense:

Interest expense – net

Other income – net

Loss on extinguishment of debt

Other (income) expense

Income (loss) before income taxes

Income before income taxes

Income tax expense (benefit)

Net income (loss)

Net loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization

Net income (loss) attributable to redeemable noncontrolling interests

Net income (loss) attributable to Class A Common Stockholders

Income (loss) per Class A Common Stock (1) :

Net income attributable to redeemable noncontrolling interests

Net income attributable to Class A common stockholders

Net income per Class A common stock:

Weighted average Class A common stock outstanding:

(1) There were no shares of Class A Common Stock outstanding prior to October 18, 2021.

Therefore, income (loss) per share information has been presented for the period from October 18, 2021 to December 31, 2021.

The accompanying notes are an integral part of these financial statements.

VIVID SEATS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

Years Ended December 31,

Net income (loss)

Other comprehensive income:

Other comprehensive income (loss):

Foreign currency translation adjustment

Unrealized gain on investments

Comprehensive income (loss)

Comprehensive loss attributable to Hoya Intermediate, LLC shareholders prior to reverse recapitalization

Net income (loss) attributable to redeemable noncontrolling interests

Unrealized gain on Note

Total other comprehensive income (loss)

Comprehensive income

Net income attributable to redeemable noncontrolling interests

Other comprehensive income (loss) attributable to redeemable noncontrolling interests:

Foreign currency translation adjustment attributable to redeemable noncontrolling interests

Unrealized gain on investments attributable to redeemable noncontrolling interests

Comprehensive income (loss) attributable to Class A Common Stockholders

Unrealized gain on Note attributable to redeemable noncontrolling interests

Total other comprehensive income (loss) attributable to redeemable noncontrolling interests

Comprehensive income attributable to Class A common stockholders

The accompanying notes are an integral part of these financial statements.

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(in thousands, except share/unit data)

Redeemable senior

preferred units

noncontrolling

Class A Common Shares

Class B Common Shares

Class A common stock

Class B common stock

Treasury stock

comprehensive

shareholders'

income (loss)

equity (deficit)

Redeemable noncontrolling interests

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income (loss)

Total shareholders' equity (deficit)

Balances at January 1, 2022

Net loss prior to reverse recapitalization

Loss reclassified from accumulated other comprehensive loss to earnings prior to reverse recapitalization

Deemed contribution from former parent prior to reverse recapitalization

Accretion of senior preferred units prior to reverse recapitalization

Reverse recapitalization, net

Net loss after reverse recapitalization

Deemed contribution from former parent after reverse recapitalization

Equity-based compensation after reverse recapitalization

Change in fair value of warrants

Issuance of shares related to acquisition

Dividends paid to Class A Common Shareholders

Subsequent remeasurement of Redeemable noncontrolling interests

Balances at December 31, 2021

Issuance of shares

Deemed contribution from former parent

Issuances of Class A common stock

Deemed contributions from former parent

Equity-based compensation

Repurchases of common stock

Distributions to non-controlling interests

Repurchases of Class A common stock

Tax distributions to redeemable noncontrolling interests

Reclassification of contingent consideration

Increase in Class A common stock outstanding following warrant exchange

Subsequent remeasurement of redeemable noncontrolling interests

Increase in common shares outstanding following warrant exchange

Balances at December 31, 2022

Issuance of shares

Deemed contribution from former parent

2023 Secondary Offerings of Class A common stock

Issuances of Class A common stock

Deemed contributions from former parent

Equity-based compensation

Repurchases of common stock

Distributions to non-controlling interests

Repurchases of Class A common stock

Tax distributions to redeemable noncontrolling interests

Other comprehensive income

2023 Secondary Offerings

Establishment of liabilities under TRA, net of tax and other tax impact of 2023 Secondary Offerings (Note 20)

Issuance of shares related to acquisition

Options Contingent Warrants termination

Issuance of Class A common stock related to acquisition

Termination of Option Contingent Warrants

Subsequent remeasurement of redeemable noncontrolling interests, net of tax impacts

Balances at December 31, 2023

Issuances of Class A common stock

Deemed contributions from former parent

Equity-based compensation

Repurchases of Class A common stock, net of tax impacts

Tax distributions to redeemable noncontrolling interests

Other comprehensive loss

Net settlement of equity incentive awards

Subsequent remeasurement of redeemable noncontrolling interests

Balances at December 31, 2024

The accompanying notes are an integral part of these financial statements.

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Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Amortization of leases

Amortization of deferred financing costs and interest rate cap

Equity-based compensation expense

Amortization of deferred financing costs

Equity-based compensation

Change in fair value of warrants

Loss on asset disposals

Change in fair value of derivative asset

Deferred income tax expense (benefit)

Non-cash interest income – net

Unrealized foreign currency loss (gain)

Adjustment of liabilities under TRA

Change in fair value of contingent consideration

Loss on extinguishment of debt

Loss on asset disposals

Deferred taxes

Non-cash interest income

Interest expense paid-in-kind

Foreign currency revaluation gain

TRA liability adjustment

Change in assets and liabilities:

Accounts receivable

Changes in operating assets and liabilities:

Accounts receivable – net

Inventory – net

Prepaid expenses and other current assets

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Accrued expenses and other current liabilities

Deferred paid-in-kind interest paid on May 2020 First Lien Loan

Deferred revenue

Other non-current assets and liabilities

Long-term lease liabilities

Other assets and liabilities – net

Net cash provided by operating activities

Cash flows from investing activities

Acquisition of business, net of cash acquired

Investments in convertible promissory note and warrant

Purchases of property and equipment

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Investments in developed technology

Purchases of seat images

Disbursement of 2024 Sponsorship Loan

Payments of Acquired Domain Name Obligation

Transfer of cash consideration during Acquisitions, net of cash acquired

Investment in Note and Warrant

Net cash used in investing activities

Cash flows from financing activities

Proceeds from February 2022 First Lien Loan

Payments of February 2022 First Lien Loan

Payments of 2017 Term Loans

Proceeds from 2022 First Lien Loan

Payments of 2022 First Lien Loan

Repurchases of Class A common stock

Tax distributions to redeemable noncontrolling interests

Payments of Shoko Chukin Bank Loan

Distributions to non-controlling interests

Repurchases of common stock

Payments of deferred financing costs and other debt-related expenses

Proceeds from 2024 First Lien Loan

Payments of 2024 First Lien Loan

Payments of taxes related to net settlement of equity incentive awards

Payment of liabilities under TRA

Cash paid for milestone payments

Proceeds from PIPE Financing

Proceeds from the Merger Transaction

Redemption of Redeemable Senior Preferred Units

Payments of May 2020 First Lien Loan

Payments of June 2017 First Lien Loan

Prepayment penalty on extinguishment of debt

Payment of reverse recapitalization costs

Dividends paid to Class A Common Stock Shareholders

Payments of deferred financing costs and other debt-related costs

Net cash (used in) provided by financing activities

Impact of foreign exchange on cash, cash equivalents, and restricted cash

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

Net increase (decrease) in cash, cash equivalents, and restricted cash

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Cash, cash equivalents, and restricted cash – end of period

Supplemental disclosure of cash flow information:

Paid-in-kind interest added to May 2020 First Lien Loan principal

VIVID SEATS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Supplemental disclosures of cash flow information

Cash paid for interest

Cash paid for income tax

Cash paid for income taxes

Cash paid for operating lease liabilities

Supplemental disclosures of non-cash investing and financing activities

Equity-based compensation expense related to capitalized development costs

Acquisition non-cash consideration

Property and equipment acquired through tenant improvement allowance

Right-of-use assets obtained in exchange for lease obligations

Right-of-use assets obtained in exchange for operating lease liabilities

Property and equipment obtained through tenant improvement allowance

Domain obtained through Acquired Domain Name Obligation

Reduction of deferred tax assets under the repurchases of Class A common stock, net of tax impacts

Transfer of non-cash consideration during Vegas.com Acquisition

Establishment of liabilities under TRA

Establishment of deferred tax assets under the 2023 Secondary Offerings and other equity transactions

Establishment of deferred tax assets under 2023 Secondary Offerings and other equity transactions

The accompanying notes are an integral part of these financial statements.

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NOTES to the Consolidated Financial Statements

Background, Description of Business and Basis of Presentation

Background and Basis of Presentation

Vivid Seats Inc.

("VSI") and its subsidiaries including Hoya Intermediate, LLC ("Hoya Intermediate"), Hoya Midco, LLC, and Vivid Seats LLC (collectively the “Company,” “us,” “we,” and “our”) provide an online ticket marketplace that enables ticket buyers to discover and easily purchase tickets to concert, sporting and theater events in the United States, Canada and Japan.

Through our Marketplace segment, we operate an online platform enabling ticket buyers to purchase tickets to live events, while enabling ticket sellers and partners to seamlessly manage their operations.

In our Resale segment, we acquire tickets to resell on secondary ticket marketplaces, including our own.

Our consolidated financial statements include all of our accounts, including those of our consolidated subsidiaries.

(“VSI”) and its subsidiaries, including Hoya Intermediate, LLC (“Hoya Intermediate”), Hoya Midco, LLC, and Vivid Seats LLC (collectively, the “Company,” “us,” “we,” and “our”), provide an online ticket marketplace that enables ticket buyers to easily discover and purchase tickets to live events and attractions and book hotel rooms and packages in the United States, Canada, and Japan.

In our Marketplace segment, we primarily act as an intermediary between ticket buyers, sellers, and partners within our online ticket marketplace, while enabling ticket sellers and partners to seamlessly manage their operations.

In our Resale segment, we primarily acquire tickets to resell on secondary ticket marketplaces, including our own.

We have prepared these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S.

These consolidated financial statements include all of our accounts, including those of our consolidated subsidiaries.

All intercompany transactions and balances have been eliminated in consolidation.

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Certain prior period amounts have been reclassified to conform to current period presentation.

These reclassifications had no effect on previously reported totals for assets, liabilities, shareholders' equity (deficit), cash flows or net income (loss).

VSI was incorporated in Delaware on March 29, 2021 as a wholly owned subsidiary of Hoya Intermediate for the purpose of completing the transactions (collectively, the “Merger Transaction”) contemplated by the transaction agreement, dated April 21, 2021 (the “Transaction Agreement”), among Horizon Acquisition Corporation, a publicly traded special purpose acquisition company (“Horizon”), Hoya Topco, LLC (“Hoya Topco”), Hoya Intermediate, VSI, and the other parties thereto.

VSI was incorporated in Delaware on March 29, 2021 as a wholly owned subsidiary of Hoya Intermediate for the purpose of completing the transactions (collectively, the “Merger Transaction”) contemplated by the transaction agreement, dated April 21, 2021, among VSI, Horizon Acquisition Corporation, a publicly traded special purpose acquisition company (“Horizon”), Hoya Intermediate, Horizon Sponsor, LLC (“Horizon Sponsor”), and Hoya Topco, LLC (“Hoya Topco”).

The Merger Transaction and PIPE Financing

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Accordingly, our consolidated financial statements represent a continuation of Hoya Intermediate’s financial statements with the net assets of Hoya Intermediate stated at historical cost.

In connection with the Merger Transaction, VSI:

• Issued 29,431,260 shares of Class A common stock to former shareholders of Horizon, whereby $ 293.2 million in cash and cash equivalents (after the payment of $ 18.7 million in transaction costs incurred by Horizon) of Horizon became avail able to VSI.

We subsequently paid an additional $ 15.5 million in transaction costs incurred by Horizon using such cash and cash equivalents;

• Issued 118.2 million shares of Class B common stock and warrants to purchase 6.0 million shares of Class B common stock at an exercise price of $ 0.001 per share, which are only exercisable upon the exercise of a corresponding Hoya Intermediate Warrant (as defined below), to Hoya Topco in exchange for the outstanding units of Hoya Intermediate;

• Issued to certain investors, including Horizon Sponsor, LLC (“Horizon Sponsor”), 47,517,173 shares of Class A common stock in exchange for $ 475.2 million in aggregate consideration, pursuant to a private investment in public equity (the “PIPE Financing”);

In connection with the Merger Transaction, we:

• issued 29,431,260 shares of Class A common stock to former shareholders of Horizon, whereby $ 293.2 million in cash and cash equivalents (after the payment of $ 18.7 million in transaction costs incurred by Horizon) of Horizon became avail able to VSI, and subsequently paid an additional $ 15.5 million in transaction costs incurred by Horizon using such cash and cash equivalents;

• issued 118,200,000 shares of Class B common stock and warrants to purchase 6,000,000 shares of Class B common stock at an exercise price of $ 0.001 per share, which are only exercisable upon the exercise of a corresponding Intermediate Warrant (as defined below), to Hoya Topco in exchange for its outstanding Intermediate Units (as defined below);

• issued to certain investors, including Horizon Sponsor, 47,517,173 shares of Class A common stock in exchange for $ 475.2 million in aggregate consideration, pursuant to a private investment in public equity (the “PIPE Financing”);

• used the proceeds from the transactions described above to pay (i) $ 482.4 million towards our outstanding debt, (ii) $ 236.0 million to facilitate the redemption of preferred units of Hoya Intermediate and (iii) $ 54.3 million for tr ansaction fees incurred in connection with the Merger Transaction;

• Issued to Horizon Sponsor (i) warrants to purchase 17.0 million shares of Class A common stock at an exercise price of $ 10.00 per share (the “$10 Exercise Warrants”), (ii) warrants to purchase 17.0 million shares of Class A common stock at an exercise of $ 15.00 per share (the “$15 Exercise Warrants” and, together with the $10 Exercise Warrants, the "Exercise Warrants"), (iii) warrants to purchase

• issued to Horizon Sponsor (i) 50,000 shares of Class A common stock, (ii) warrants to purchase 17,000,000 shares of Class A common stock at an exercise price of $ 10.00 per share (the “$10 Exercise Warrants”), (iii) warrants to purchase 17,000,000 shares of Class A common stock at an exercise of $ 15.00 per share (the “$15 Exercise Warrants” and, together with the $10 Exercise Warrants, the “Exercise Warrants”), and (iv) warrants to purchase 6,519,791 shares of Class A common stock at an exercise price of $ 11.50 per share (the “Private Warrants”);

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

6,519,791 shares of Class A common stock at an exercise price of $ 11.50 per share (the “Private Warrants”) and (iv) 50,000 shares of Class A common stock;

• issued to former warrant holders of Horizon (including Horizon Sponsor) warrants to purchase 18,132,776 shares of Class A common stock at an exercise price of $ 11.50 per share (the “Public Warrants”).

In connection with the Merger Transaction, Hoya Intermediate issued to Hoya Topco warrants to purchase 3.0 million common units of Hoya Intermediate (“Intermediate Units”) at an exercise price of $ 10.00 per unit and warrants to purchase 3.0 million Intermediate Units at an exercise of $ 15.00 per unit (collectively, the “Hoya Intermediate Warrants”).

A portion of the Hoya Intermediate Warrants, consisting of warrants to purchase 1,000,000 Intermediate Units at exercise prices of $ 10.00 and $ 15.00 per unit, respectively (the “Option Contingent Warrants”), were issued in tandem with stock options issued by VSI to members of our management team (the “Management Options”).

The Option Contingent Warrants only become exercisable by Hoya Topco if a Management Option is forfeited or expires unexercised.

In connection with the Merger Transaction, Hoya Intermediate issued to Hoya Topco warrants to purchase 3,000,000 common units of Hoya Intermediate (“Intermediate Units”) at an exercise price of $ 10.00 per unit (the “$ 10 Intermediate Warrants “ ) and warrants to purchase 3,000,000 Intermediate Units at an exercise of $ 15.00 per unit (the “$ 15 Intermediate Warrants“ and, together with the $ 10 Intermediate Warrants, the “Intermediate Warrants”).

A portion of the Intermediate Warrants, consisting of 1,000,000 $ 10 Intermediate Warrants and 1,000,000 $ 15 Intermediate Warrants (together, the “Option Contingent Warrants”), were issued in tandem with stock options we issued to members of our management team and would only become exercisable by Hoya Topco if such a stock option was forfeited or expired unexercised.

On December 7, 2023, Hoya Topco voluntarily terminated all of the Option Contingent Warrants.

Immediately following the Merger Transaction, the legacy unitholders of Hoya Intermediate owned a controlling interest in VSI through their ownership of Class B common stock.

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Use of Estimates

We use estimates and assumptions in the preparation of our consolidated financial statements in accordance with GAAP.

We use estimates and assumptions in the preparation of our consolidated financial statements in accordance with U.S.

These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

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breakage rates related to customer credits;

usage assumptions for our Vivid Seats Rewards loyalty program;

usage assumptions for our rewards loyalty program (the “Vivid Seats Rewards Program”) ;

inventory valuation;

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As of December 31, 2024 and 2023 , we have not experienced any loss or lack of access to our cash and cash equivalents.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Restricted Cash

Restricted cash includes cash and cash equivalents that are restricted through legal contracts or regulations, including funds reserved for Vivid Picks users, and letters of credit required by certain vendors.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Foreign Currency Translation

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Revenues and expenses of foreign operations are translated at the weighted average rate of exchange during the applicable period.

The resulting unrealized cumulative translation adjustment is recorded as a component of Accumulated other comprehensive income (loss) in Shareholders’ equity (deficit).

Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in Other (income) expense in the period in which they occur .

The resulting cumulative foreign currency translation adjustment is recorded in the Consolidated Balance Sheets as a component of Accumulated other comprehensive income (loss) within Shareholders' equity.

Unrealized foreign currency gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in Other income – net in the Consolidated Statements of Operations in the period in which they occur.

Business Combinations

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The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date.

Accounts Receivable and Credit Policies

Accounts Receivable – Net

Accounts receivable consist primarily of uncollateralized payment processor obligations due under normal trade terms typically requiring payment within three business days, amounts due from marketplace sellers and distribution partners for canceled events and commissions due from insurance purchased by ticket buyers.

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Accounts receivable balances are stated net of allowance for credit losses and bad debt expense is presented as a reduction of Revenues in the Consolidated Statements of Operations.

Inventory – Net

Inventory consists primarily of tickets to live events purchased by our Resale segment.

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A provision is recorded to adjust inventory to its estimated realizable value when inventory is determined to be in excess of anticipated demand.

During the years ended December 31, 2023, 2022 and 2021, we incurred inventory write-downs of $ 4.7 million , $ 5.0 million , and $ 2.1 million , respectively, which are presented in Cost of revenues in the Consolidated Statements of Operations.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Property and Equipment

During the years ended December 31, 2024, 2023, and 2022, we incurred inventory write-downs of $ 7.0 million, $ 4.7 million, and $ 5.0 million, respectively, which are recorded in Cost of revenues in the Consolidated Statements of Operations.

Property and Equipment – Net

Property and equipment are stated at cost, net of depreciation.

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Leasehold improvements are amortized over the shorter of the term of the lease or the improvements’ estimated useful lives.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

We determine if an arrangement is or contains a lease at inception and classify each lease as operating or financing.

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As most of our leases do not provide an implicit interest rate, we use the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments.

Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets and rent expense for these short-term leases is recognized in General and administrative expenses in the Consolidated Statements of Operations on a straight-line basis over the lease term.

Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets and rent expense for these short-term leases is recorded in General and administrative expenses in the Consolidated Statements of Operations on a straight-line basis over the lease term.

We have applied the practical expedient which allows us to not separate lease and non-lease components for all leases.

Recoverability of Long-Lived Assets

We review our long-lived assets (property and equipment – net and personal seat licenses – net) for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable.

The fair value of our long-lived assets is determined using both the market and income approaches, utilizing Level 3 inputs.

If circumstances require a long-lived asset or asset group to be held and used be tested for possible impairment, we first compare the undiscounted cash flows expected to be generated by that long-lived asset or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent the carrying amount exceeds its fair value.

No impairment triggering events to our long-lived assets were identified during the years ended December 31, 2023, 2022 and 2021 .

Goodwill and Intangible Assets

Goodwill – Net and Intangible Assets – Net

Goodwill represents the excess purchase price over the fair value of the net assets acquired.

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If the fair value of the reporting unit or the indefinite-lived intangible assets is in excess of its carrying value, the related goodwill or the indefinite-lived intangible assets are not impaired.

If the fair value of the reporting unit is less than the carrying value, we recognize an impairment equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

If the fair value of the indefinite-lived intangible assets is less than the carrying value, we recognize an impairment equal to the difference.

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We review our definite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable.

If circumstances require a definite-lived intangible asset or its asset group to be held and used be tested for possible impairment, we first compare the undiscounted cash flows expected to be generated by that definite-lived intangible asset or asset group to its carrying amount.

If the carrying amount of the definite-lived intangible asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

The fair value of our definite-lived intangible assets or asset group is determined using both the market and income approaches, utilizing Level 3 inputs.

No impairment triggering events to our definite-lived intangible assets were identified during the years ended December 31, 2024, 2023, and 2022.

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Capitalized development costs

Acquired domain name

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Capitalized Development Cost s and Cloud Computing Arrangements Implementation Costs

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Qualifying development costs, including those incurred for upgrades and enhancements that result in additional functionality to existing software, are capitalized.

Capitalized development costs are classified as Intangible assets – net on the Consolidated Balance Sheets and amortized using the straight-line method over the three-year useful life of the applicable software.

The amortization is presented in Depreciation and amortization expense in the Consolidated Statements of Operations.

We capitalize qualifying implementation costs incurred under cloud computing arrangements (“CCAs”).

Costs incurred during the application development stage related to the implementation of CCAs are capitalized and included in Prepaid expenses and other current assets or Other non-current assets in the Consolidated Balance Sheets based on the terms of the associated CCA.

Amortization of capitalized implementation costs is recognized on a straight-line basis over the terms of the associated CCA when it is ready for its intended use and is included in General and administrative expense in the Consolidated Statements of Operations.

Costs related to preliminary project activities and post-implementation activities are expensed as incurred.

During the years ended December 31, 2023, 2022 and 2021, capitalized implementation costs were less than $ 0.1 million.

Capitalized development costs are recorded in Intangible assets – net in the Consolidated Balance Sheets and are amortized using the straight-line method over the three-year useful life of the applicable software.

The accompanying amortization is recorded in Depreciation and amortization in the Consolidated Statements of Operations.

Accounts Payable

Accounts payable primarily consists of amounts due to ticket sellers across our platform.

These amounts are recorded at the time the Marketplace orders are confirmed and are payable following the event, or as otherwise agreed upon.

Accrued Customer Credits

We may issue credits to customers for cancelled events or travel services that can be applied to future purchases on our marketplace.

The amount recognized in Accrued expenses and other current liabilities in the Consolidated Balance Sheets represents the balance of credits issued to these customers.

The amount recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets represents the balance of credits issued to these customers.

Breakage income from customer credits that are not expected to be used, and are not subject to escheatment, is estimated and recognized as revenue in proportion to the pattern of redemption for the customer credits that are used.

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When customer credits are used to make a purchase, revenue is recognized for the new transaction.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Accrued Future Customer Compensation

Provisions for accrued future customer compensation are included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets and represent compensation to be paid to customers for event cancellations or other service issues related to previously recorded sales transactions.

The expected recoveries of these obligations are included in Prepaid expenses and other current assets.

These provisions, which are based on historic experience, revenue volumes for future events, and management's estimate of the likelihood of future event cancellations, are recognized as a component of Revenue.

The expected recoveries of these obligations are recorded in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

These provisions, which are based on historic experience, revenue volumes for future events, and management’s estimate of the likelihood of future event cancellations, are recognized as a component of Revenues in the Consolidated Statements of Operations.

This estimated accrual could be impacted by future activity differing from our estimates, the effects of which could be material to our consolidated financial statements.

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federal and most applicable state and local income tax purposes.

As a partnership, Hoya Intermediate's taxable income and losses were passed through to and included in the taxable income of its members, including VSI, for periods following the Merger Transaction.

Accordingly, amounts related to income taxes were zero for us prior to the Merger Transaction, and therefore, are not representative of future amounts expected to be incurred by us.

As a partnership, Hoya Intermediate’s taxable income was passed through to and included in the taxable income of its members, including VSI, for periods following the Merger Transaction.

Following the Merger Transaction, our legal parent entity is VSI.

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The realization of the deferred tax assets is dependent on the amount of our future taxable income.

We recognize interest and penalties related to underpayment of income taxes in Income tax expense on the Consolidated Statements of Operations.

To date, the interest or penalties incurred related to income taxes have not been material.

Tax Receivable Agreement

In connection with the Merger Transaction, we entered into a Tax Receivable Agreement (the "TRA") with the existing Hoya Intermediate shareholders that provides for our payment to such shareholders of 85 % of the amount of the tax savings, if any, that we realize (or, under certain circumstances, are deemed to realize) as a result of, or attributable to, (i) increases in the tax basis of assets owned directly or indirectly by Hoya Intermediate or its subsidiaries from, among other things, any redemptions or exchanges of Intermediate Units, (ii) existing tax basis (including depreciation and amortization deductions arising from such tax basis) in long-lived assets owned directly or indirectly by Hoya Intermediate and its subsidiaries, and (iii) certain other tax benefits (including deductions in respect of imputed interest) related to us making payments under the TRA.

Term debt is carried at the outstanding principal balance, less debt issuance costs and any unamortized discount or premium.

Deferred borrowing costs and discounts are amortized to interest expense over the terms of the respective borrowings using the effective interest method.

Upon the repayment of our term debt, we reflected prepayment penalties and the write-off of any unamortized borrowing costs and discounts as loss on extinguishment of debt on the Consolidated Statements of Operations.

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NOTES to the Consolidated Financial Statements

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value of our financial instruments is disclosed based on the fair value hierarchy using the following three categories:

We recognize interest and penalties related to underpayment of income taxes in Income tax expense (benefit) in the Consolidated Statements of Operations.

To date, the interest or penalties incurred related to income taxes have not been material.

Tax Receivable Agreement

In connection with the Merger Transaction, we entered into a Tax Receivable Agreement (the “TRA”) with the existing Hoya Intermediate unitholders that provides for our payment to such unitholders of 85 % of the amount of any tax savings that we realize (or, under certain circumstances, are deemed to realize) as a result of, or attributable to, (i) increases in the tax basis of assets owned directly or indirectly by Hoya Intermediate or its subsidiaries from, among other things, any redemptions or exchanges of Intermediate Units, (ii) existing tax basis (including depreciation and amortization deductions arising from such tax basis) in long-lived assets owned directly or indirectly by Hoya Intermediate and its subsidiaries, and (iii) certain other tax benefits (including deductions in respect of imputed interest) related to us making payments under the TRA.

Long-Term Debt – Net

Long-term debt is carried at the outstanding principal balance, less debt issuance costs and any unamortized discount or premium.

Deferred borrowing costs and discounts are amortized over the terms of the respective borrowings using the effective interest method and are recorded in Interest expense – net in the Consolidated Statements of Operations.

Upon the repayment of our term debt in 2022, we expensed all applicable prepayment penalties and wrote-off all unamortized borrowing costs and discounts, both of which are recorded in Loss on extinguishment of debt in the Consolidated Statements of Operations.

Fair Value Measurements

We measure certain assets and liabilities at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements (“ASC 820”), which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, establishes a framework for measuring fair value in U.S.

GAAP, and expands disclosures about fair value measurements.

To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

• Level 1 — Measurements that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

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These fair value measurements require significant judgment.

Our assets and liabilities measured at fair value on a recurring basis are presented in Note 11, Investments , Note 13, Debt, and Note 15, Financial Instruments .

Our non-financial assets, such as goodwill, intangible assets and long-lived assets, which are measured at fair value on a nonrecurring basis, utilizing Level 3 inputs, are presented in Note 9, Goodwill and Intangible Assets .

Other financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates their fair value because of the short-term nature of these instruments.

Our assets and liabilities measured at fair value on a recurring basis are presented in Note 11, Investments , Note 13, Long-Term Debt – Net, and Note 15, Financial Instruments .

Our non-financial assets, such as Goodwill – Net, Intangible assets – Net, and various long-lived assets, which are measured at fair value on a nonrecurring basis, utilizing Level 3 inputs, are presented in Note 10, Goodwill – Net and Intangible Assets – Net .

Other financial instruments, including Accounts receivable – Net and Accounts payable, are carried at cost, which approximates their fair value because of the short-term nature of these instruments.

We did not have any transfers of financial instruments between valuation levels during the years ended December 31, 2024, 2023, and 2022 .

In connection with the Merger Transaction, we issued several types of warrants.

We separately evaluate the terms for each of these outstanding warrants in accordance with Accounting Standards Codification ("ASC") 480, Distinguishing Liabilities from Equity, and ASC 815-40, Derivatives and Hedging:

Contracts in an Entity’s Own Equity, to determine the appropriate classification and accounting treatment.

The Public Warrants, the Private Warrants and the Exercise Warrants meet the criteria to be classified as equity instruments.

Because the Hoya Intermediate Warrants are exercisable for Intermediate Units, which allow for a potential cash redemption at the discretion of the unitholder, they are classified as a liability in Other liabilities on the Consolidated Balance Sheets.

The warrant liability is subject to a fair value remeasurement each period with an offsetting adjustment reflected in Other expenses on the Consolidated Statements of Operations.

We separately evaluate the terms for each of these outstanding warrants in accordance with ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC Topic 815 , Derivatives and Hedging (“ASC 815”), to determine the appropriate classification and accounting treatment.

The Public Warrants, the Private Warrants and the Exercise Warrants meet the criteria to be

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NOTES to the Consolidated Financial Statements

classified as equity instruments.

Because the Intermediate Warrants are exercisable for Intermediate Units, which allow for a potential cash redemption at the discretion of the unitholder, they are recorded in Other liabilities in the Consolidated Balance Sheets.

The warrant liability is subject to a fair value remeasurement each period with an offsetting adjustment recorded in Other income – net in the Consolidated Statements of Operations.

Redeemable Noncontrolling Interests

VSI holds a 63.7 % in terest in Hoya Intermediate, with the remainder held by Hoya Topco.

VSI holds a 63.4 % inter est in Hoya Intermediate, with the remainder held by Hoya Topco.

Hoya Topco’s interest in Hoya Intermediate represents a redeemable noncontrolling interest.

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Our redeemable noncontrolling interests were initially measured at Hoya Topco’s share in the net assets of Hoya Intermediate upon consummation of the Merger Transaction.

Subsequent remeasurements of our redeemable noncontrolling interests are recorded as a deemed dividend each reporting period, which reduces retained earnings, if any, or additional paid-in capital on the Consolidated Balance Sheets.

Subsequent remeasurements of our redeemable noncontrolling interests are recorded as a deemed dividend each reporting period, which reduces Retained earnings, if any, or Additional paid-in capital in the Consolidated Balance Sheets.

Remeasurements of our redeemable noncontrolling interests are based on the fair value of the Class A common stock.

Offering Costs

We incurred incremental costs associated with the Merger Transaction and the PIPE Financing related for legal, accounting and other third-party fees.

In accordance with Staff Accounting Bulletin (“SAB”) Topic 5.A, Expenses of Offering , we deferred certain incremental costs directly associated with the Merger Transaction and the PIPE Financing.

These deferred costs were capitalized by us and subsequently charged against the gross proceeds of the

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NOTES to the Consolidated Financial Statements

Merger Transaction and the PIPE Financing as a reduction to additional paid-in capital on the Consolidated Balance Sheets.

Our total transaction costs during the year ended December 31, 2021 were $ 32.7 million, of which $ 20.2 million was charged against the gross proceeds of the Merger Transaction and the PIPE Financing.

Equity-Based Compensation

We account for restricted stock units ("RSUs"), stock options, and profits interest at their grant date fair value.

We account for restricted stock units (“RSUs”) and stock options at their grant date fair value.

We award RSUs to our employees, directors, and certain consultants.

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The awards are subject to the recipient’s continued service through the applicable vesting date.

The grant-date fair value of stock options is estimated using an option pricing model, which requires us to make assumptions and judgments about the variables used in the calculation, related to the volatility of the common stock, risk-free interest rate, and expected dividends.

Expense related to grants of equity-based awards is recognized as equity-based compensation in the Consolidated Statements of Operations.

Prior to the Merger Transaction, certain members of management received profit interests in Hoya Topco and phantom units in a cash bonus pool funded by Hoya Topco.

Under ASC 718, Compensation–Stock Compensation , and ASC 480, Distinguishing Liabilities from Equity , the grants of profits interest meet the criteria to be recognized as equity-classified awards, whereas the grants of phantom units meet the criteria to be recognized as liability-classified awards.

For the profit interests and phantom units, we used a market-based approach to determine the total equity value of Hoya Topco and allocated the resulting value between share classes using the Black-Scholes model to determine the grant date fair value of employee grants.

The grant-date fair value of stock options is estimated using an option pricing model, which requires us to make assumptions and judgments about the variables used in the calculation, related to the expected term, volatility of our common stock, risk-free interest rate, and dividend yield.

Expenses related to grants of equity-based awards are recognized as equity-based compensation and are recorded in General and administrative expenses in the Consolidated Statements of Operations.

Prior to the Merger Transaction, certain members of management received profits interests in Hoya Topco and phantom units in a cash bonus pool funded by Hoya Topco.

Under ASC 480 and ASC Topic 718, Compensation – Stock Compensation , the grants of profits interests meet the criteria to be recognized as equity-classified awards, whereas the grants of phantom units meet the criteria to be recognized as liability-classified awards.

For the profits interests and phantom units, we used a market-based approach to determine the total equity value of Hoya Topco and allocated the resulting value between share classes using the Black-Scholes model to determine the grant date fair value of employee grants.

The exercise prices used are based on various scenarios considering the waterfall payout structure of the units that exists at the Hoya Topco level.

For phantom units with service and performance conditions, we recognize a liability for the fair value of the outstanding units only when we conclude it is probable that the performance condition will be achieved.

As of December 31, 2023 and 2022, it is not probable the performance condition will be achieved.

Segment Reporting

Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by our Chief Operating Decision Maker (our “CODM”) in making decisions regarding resource allocation and performance assessment.

Our CODM is our Chief Executive Officer.

We have determined that we have two operating and reportable segments:

Marketplace and Resale.

On June 10, 2024, the Board of Managers of Hoya Topco (the “Hoya Topco Board”) approved the redemption, repurchase and cancellation by Hoya Topco (using Hoya Topco’s funds) of all of its outstanding profits interests held by our employees (including the Class B-1, Class D, and Class E Units discussed elsewhere in this Annual Report on Form 10-K).

Accordingly, we recognized equity-based compensation expense related to the profits interests of $ 4.6 million for the year ended December 31, 2024.

See Note 21, Equity-Based Compensation , for more detail.

On June 10, 2024, the Hoya Topco Board also approved the repurchase and cancellation by Hoya Topco (using Hoya Topco’s funds) of all of its outstanding phantom units held by our employees.

The phantom units held service and performance conditions, requiring us to recognize a liability for the fair value the outstanding phantom units only when we conclude it is probable that the performance conditions will be achieved.

Accordingly, we recognized

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NOTES to the Consolidated Financial Statements

equity-based compensation expense related to the phantom units of $ 5.0 million for the year ended December 31, 2024 .

There was no equity-based compensation expense previously recognized related to the phantom units.

Hoya Topco had no outstanding profits interests or phantom units held by our employees, and we had no unrecognized equity-based compensation expense related thereto, as of December 31, 2024 .

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers .

We report revenue on a gross or net basis based on management’s assessment of whether we are acting as a principal or agent in the transaction.

We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606“).

We report revenue on a gross or net basis based on our assessment of whether we are acting as a principal or agent in the transaction.

Revenue is reported net of sales taxes.

The timing of revenue recognition, and the determination of whether we are acting as a principal or an agent in a transaction, is based on the evaluation of control over the asset being transferred.

We act as an intermediary between buyers, sellers and partners in our online marketplaces.

Marketplace Segment

We act as an intermediary between buyers, sellers, and partners in our online platform.

Revenue primarily consists of service and delivery fees and is reduced by incentives provided to buyers.

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In all of these transactions, we act as an agent as we do not control the asset prior to facilitating the transfer to the buyer.

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NOTES to the Consolidated Financial Statements

Payment from the ticket buyer is generally due at the time of sale.

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To the extent we estimate that a portion of the refund is recoverable from ticket sellers or partners, we record the recovery as revenue to align with the net presentation of the original transaction.

In extreme circumstances, such as the COVID-related shutdowns during 2020, the timing of event cancellations versus new sales transactions can result in customer compensation costs exceeding current period sales resulting in negative Marketplace revenue for that period.

In extreme circumstances, such as the COVID-related shutdowns during 2020, the timing of event cancellations vs.

new sales transactions can result in customer compensation costs exceeding current period sales resulting in negative Marketplace revenue for that period.

In certain instances, ticket buyers are compensated with credit to be used on future purchases.

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The revenue we earn from our Vivid Picks daily fantasy sports offering is the difference between cash entry fees collected and cash amounts paid out to users for winning picks, less customer promotions and incentives.

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NOTES to the Consolidated Financial Statements

Resale Segment

We sell tickets we own on secondary ticket marketplaces.

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When our Resale business sells a ticket on our own marketplace, the service fee is recorded in Marketplace revenues and the sales price of the ticket is recorded in Resale revenues.

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NOTES to the Consolidated Financial Statements

Deferred Revenue

Deferred revenue consists of fees received related to unsatisfied performance obligations at the end of the period.

The majority of unsatisfied performance obligations are related to our Vivid Seats Rewards loyalty program, which allows enrolled Vivid Seats ticket buyers to earn stamps for each ticket purchased.

The majority of unsatisfied performance obligations are related to the Vivid Seats Rewards Program, which allows enrolled Vivid Seats ticket buyers to earn stamps for each ticket purchased.

These buyers can convert those stamps into credits upon reaching certain thresholds and then redeem those credits on future transactions.

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Deferred revenue also consists of service fees on hotel and tour transactions where check-in has not yet occurred.

In addition, r evenue from sales of contingent events, such as postseason sporting events, is initially recorded as deferred revenue in the Consolidated Balance Sheets and is recognized when the contingency is resolved.

Sales taxes are imposed by state, county, and city governmental authorities.

We collect sales tax from ticket buyers on our marketplace where required and remit to the appropriate governmental agency.

We also collect and remit sales tax on certain resale sales.

Collected sales taxes are recorded as a liability until remitted.

There is no impact on the Consolidated Statements of Operations as revenue is recorded net of sales taxes.

In addition, revenue from sales of contingent events, such as postseason sporting events, is initially recorded as Deferred revenue in the Consolidated Balance Sheets and is recognized when the contingency is resolved.

Sales and Indirect Taxes

Sales and indirect taxes are imposed by country, state, county, and city governmental authorities.

In most jurisdictions, we collect sales and indirect taxes from ticket buyers in our Marketplace segment where required and remit to the appropriate governmental agency.

For these jurisdictions where we collect and remit taxes, they are recorded as a liability until remitted and there is no impact on the Consolidated Statements of Operations as revenues are recorded net of sales taxes.

We also remit sales and indirect taxes on certain Resale segment transactions.

Sales and indirect taxes that are recorded in General and administrative expenses in the Consolidated Statements of Operations represent estimated liabilities for jurisdictions for which we are not yet collecting and remitting taxes.

Advertising Costs

We utilize various forms of advertising, including paid search, brand partnerships, e-mail marketing and other forms of media.

Advertising costs, which are expensed as incurred, were $ 273.5 million , $ 247.3 million and $ 180.7 million for the years ended December 31, 2023, 2022, and 2021 respectively.

Advertising costs are presented as part of Marketing and selling expense in the Consolidated Statements of Operations.

Advertising costs, which are expensed as incurred and recorded in Marketing and selling expenses in the Consolidated Statements of Operations, were $ 284.7 million, $ 273.5 million, and $ 247.3 million for the years ended December 31, 2024, 2023, and 2022 , respectively.

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NOTES to the Consolidated Financial Statements

Shipping and Handling

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Shipping and handling costs incurred by us are treated as fulfillment activities, and as such are included in Cost of revenues in the Consolidated Statements of Operations.

These costs are accrued upon recognition of revenue.

These costs are accrued upon the recognition of revenue.

Recent Accounting Pronouncements

As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), we are provided the option to comply with new or revised accounting guidance within the same time periods as those applicable to either public or non-public companies, including early adoption when permissible.

As an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, we are provided the option to comply with new or revised accounting guidance within the same time periods as those applicable to either public or non-public companies, including early adoption when permissible.

The following provides a brief description of recent accounting pronouncements that could have a material effect on our consolidated financial statements:

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We adopted these requirements as of January 1, 2023 with no material impact on our consolidated financial statements.

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NOTES to the Consolidated Financial Statements

Reference Rate Reform

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The ASU is intended to help stakeholders during the global market-wide reference rate transition period.

The new guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued.

The new guidance provides optional expedients and exceptions for applying U.S GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-Bank Offered Rate (“LIBOR” ) or another reference rate expected to be discontinued.

The guidance also establishes (1) a general contract modification principle that entities can apply in other areas that may be affected by reference rate reform and (2) certain elective hedge accounting expedients.

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Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers , as if it had originated the contracts.

The ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, as if it had originated the contracts.

Under the previous guidance, such assets and liabilities were recognized by the acquirer at fair value on the acquisition date.

ASU 2021-08 allows for immediate adoption on a retrospective basis for all business combinations that have occurred since the beginning of the annual period that includes the interim period of adoption.

We elected to adopt ASU 2021-08 in the fourth quarter of 2023, with no material impact on our consolidated financial statements.

Issued Accounting Standards Not Yet Adopted

The ASU allows for immediate adoption on a retrospective basis for all business combinations that have occurred since the beginning of the annual period that includes the interim period of adoption.

We elected to adopt these requirements during the three months ended December 31, 2023 with no material impact on our consolidated financial statements.

Segment Reporting – Improvements to Reportable Segment Disclosures

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Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the provisions of the amendments and the impact on our future consolidated financial statements.

We adopted these requirements during the year ended December 31,

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NOTES to the Consolidated Financial Statements

2024 with no material impact on our consolidated financial statements, other than the impact of the required changes to our Segment Reporting Note.

See Note 5, Segment Reporting , for more information.

Issued Accounting Standards Not Yet Adopted

In December 2023 , the FASB issued ASU 2023-09 , Income Taxes (Topic 740):

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The amendments are intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments are effective for annual periods beginning after December 15, 2025 for non-public companies.

We are currently evaluating the impact of the new standard, which is expected to result in enhanced disclosures, on our consolidated financial statements.

The amendments will be effective for annual reporting periods beginning after December 15, 2024.

We are currently evaluating the impact of adopting the amendments, which are expected to result in enhanced disclosures, on our future consolidated financial statements.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting—Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses .

The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, and amortization) included within income statement expense captions.

The amendments will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

The amendments are to be applied prospectively with the option for retrospective application.

We are currently evaluating the impact of adopting the amendments on our future consolidated financial statements.

Business Acquisitions

During the fiscal year 2023, we acquired VDC Holdco, LLC, the parent company of Vegas.com, LLC (together, “Vegas.com”), and WD Holdings Co., Ltd., the parent company of Wavedash Co., Ltd.

During 2023, we acquired VDC Holdco, LLC, the parent company of Vegas.com, LLC (together, “Vegas.com”), and WD Holdings Co., Ltd., the parent company of Wavedash Co., Ltd.

(together, “Wavedash”).

These transactions have been accounted for under the acquisition method of accounting in accordance with ASC 805 , Business Combinations.

These transactions have been accounted for under the acquisition method of accounting in accordance with ASC Topic 805 , Business Combinations .

Vegas.com Acquisition

On November 3, 2023 (the “Vegas.com Acquisition Date”), we acquired 100 % of the outstanding shares of Vegas.com, an online ticket marketplace headquartered in Las Vegas, Nevada (the “Vegas.com Acquisition”).

The purchase price was $ 248.3 million, consisting of $ 152.8 million in cash and $ 95.5 million in equity (for which we issued 15.6 million shares of our Class A common stock).

We financed the cash portion of the purchase price at closing with cash on hand, as well as cash balances acquired.

The acquisition was accounted for as an acquisition of a business in accordance with the acquisition method of accounting.

The goodwill acquired in the Vegas.com Acquisition is not deductible for income tax purposes.

The goodwill, which is included in our Marketplace segment, is primarily attributable to revenue opportunities with the Vegas.com service offerings and the assembled workforce.

During the year ended December 31, 2023 , we recognized an expense of $ 1.9 million for direct costs incurred in relation to the Vegas.com Acquisition , which is recorded in General and administrative expenses in the Consolidated Statements of Operations.

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NOTES to the Consolidated Financial Statements

On November 3, 2023 (the "Vegas.com Acquisition Date"), we acquired 100 % of the outstanding shares of Vegas.com, an online ticket marketplace headquartered in Las Vegas, Nevada (the “Vegas.com Acquisition”).

The purchase price was $ 248.3 million, comprising $ 152.8 million in cash and approximately 15.6 million shares of Class A common stock.

We financed the cash portion of the Vegas.com Acquisition at closing with cash on hand, as well as cash balances acquired.

The goodwill acquired in the Vegas.com Acquisition is not expected to be deductible for income tax purposes.

The goodwill, which is included in our Marketplace segment, is primarily attributable to revenue opportunities with the Vegas.com services offerings and the assembled workforce.

The purchase consideration allocation is preliminary because the evaluations necessary to assess the fair values of the net assets acquired are still in process.

The primary areas that are not yet finalized relate to the valuations of certain intangible assets and acquired income tax assets and liabilities.

Acquired assets and liability amounts are also still being finalized.

We expect to finalize the allocation of the purchase price as soon as practicable, but no later than one year from the Vegas.com Acquisition Date.

Acquisition costs directly related to the Vegas.com Acquisition were $ 1.9 million for the year ended December 31, 2023 and are included in General and administrative expenses in the Consolidated Statements of Operations.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the Vegas.com Acquisition Date (in thousands):

The following table summarizes the final allocation (described in further detail below) of the purchase price amongst Vegas.com ’s tangible and intangible assets and liabilities as of the Vegas.com Acquisition Date (in thousands):

Cash and cash equivalents

Accounts receivable

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Intangible assets

Right-of-use assets – net

Other non-current assets

Right-of-use assets

Accounts payable

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Deferred tax liability

Net assets acquired

Purchase price

During the year ended December 31, 2024, we finalized the purchase price allocation of the Vegas.com Acquisition upon the expiration of the one-year remeasurement period that began on the Vegas.com Acquisition Date.

The sole difference between the preliminary purchase price allocation and the final purchase price allocation presented above relates to a reclassification adjustment that increased the balance of Goodwill – net by $ 0.5 million and decreased the balance of Prepaid expenses and other current assets by $ 0.5 million.

The following table sets forth the components of identifiable intangible assets acquired (in thousands) and their estimated useful lives (in years) as of the Vegas.com Acquisition Date:

Estimated Useful Life

Supplier relationships

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Acquired developed technology

Total acquired intangible assets

Since the date of acquisition, Vegas.com has contributed revenue and income before income taxes of $ 15.7 million and $ 1.0 million, respectively.

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NOTES to the Consolidated Financial Statements

Acquired intangible assets

Unaudited Pro forma Financial Information

The following table summarizes, on an unaudited pro forma basis, the condensed combined results of our operations for the years ended December 31, 2023 and 2022, assuming the Vegas.com Acquisition had occurred on January 1, 2022 (in thousands):

The following table summarizes, on an unaudited pro forma basis, the condensed consolidated results of our operations for the years ended December 31, 2023 and 2022, assuming the Vegas.com Acquisition had occurred on January 1, 2022 (in thousands):

Years Ended December 31,

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The unaudited pro forma financial information presented above is for informational purposes only and is not necessarily indicative of the actual results of operations that might have occurred had the Vegas.com Acquisition occurred on January 1, 2022, nor are they necessarily indicative of future results.

The unaudited pro-forma information for all periods presented above reflects the following adjustments, where applicable, assuming the acquisition of Vegas.com had occurred on January 1, 2022:

The unaudited pro forma information for all periods presented above reflects the following adjustments, where applicable, assuming the Vegas.com Acquisition had occurred on January 1, 2022:

(i) incremental amortization expense related to the long-lived intangible assets acquired in the Vegas.com Acquisition;

(ii) reclassification of transaction costs incurred in connection to the Vegas.com Acquisition to the earliest year presented;

(iii) alignment of Vegas.com’s revenue recognition with our policies;

(iii) alignment of Vegas.com’s revenue

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NOTES to the Consolidated Financial Statements

recognition with our policies;

and (iv) elimination of interest expense incurred by Vegas.com prior to the Vegas.com Acquisition.

On September 8, 2023 (the "Wavedash Acquisition Date"), we acquired 100 % of the outstanding shares of Wavedash, an online ticket marketplace headquartered in Tokyo, Japan (the “Wavedash Acquisition”).

Wavedash Acquisition

On September 8, 2023 (the “Wavedash Acquisition Date”), we acquired 100 % of the outstanding shares of Wavedash, an online ticket marketplace headquartered in Tokyo, Japan (the “Wavedash Acquisition” and, together with the Vegas.com Acquisition, the “2023 Acquisitions” ).

The purchase price was JPY 10,946.1 million, or approximately $ 74.3 million based on the exchange rate in effect on the Wavedash Acquisition Date, before considering the net effect of cash acquired equal to the amount in the table below.

We financed the Wavedash Acquisition at closing with cash on hand.

The goodwill recognized in the Wavedash Acquisition is not expected to be deductible for income tax purposes.

We financed the purchase price at closing with cash on hand.

The acquisition was accounted for as an acquisition of a business in accordance with the acquisition method of accounting.

In connection with the Wavedash Acquisition, we also assumed long-term debt owed to Shoko Chukin Bank (the “Shoko Chukin Bank Loan”) of JPY 458.3 mil (approximately $ 3.1 million) , which had an original maturity date of June 24, 2026 and was subject to a fixed interest rate of 1.27 % per annum.

On April 4, 2024, we paid off the Shoko Chukin Bank Loan balance in its entirety.

See Note 13, Long-Term Debt – Net, for more information.

The goodwill recognized in the Wavedash Acquisition is not deductible for income tax purposes.

The goodwill, which is included in our Marketplace segment, is primarily attributable to revenue opportunities associated with Wavedash’s service offerings and assembled workforce.

The fair values of the assets acquired and liabilities assumed are preliminary and subject to change because the evaluations necessary to assess the fair values of the net assets acquired are still in process.

The primary areas that are not yet finalized relate to the valuations of certain intangible assets and acquired income tax assets and liabilities.

Acquired assets and liability amounts are also still being finalized.

We expect to finalize the allocation of the purchase price as soon as practicable, but no later than one year from the Wavedash Acquisition Date.

In connection with the Wavedash Acquisition, we also assumed long-term debt which matures in the second quarter of 2026, subject to a fixed interest rate.

See Note 13, Debt, for more information.

Acquisition costs directly related to the Wavedash Acquisition were $ 2.7 million for the year ended December 31, 2023, and are included in General and administrative expenses in the Consolidated Statements of Operations.

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The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the Wavedash Acquisition Date (in thousands ):

During the year ended December 31, 2023 , we recognized an expense of $ 2.7 million for direct costs incurred in relation to the Wavedash Acquisition, which is recorded in General and administrative expenses in the Consolidated Statements of Operations.

The following table summarizes the final allocation (described in further detail below) of the purchase price amongst Wavedash ’s tangible and intangible assets and liabilities as of the Wavedash Acquisition Date (in thousands):

Cash and cash equivalents

Accounts receivable

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Right-of-use assets

Other net assets

Intangible assets

3 unchanged sentences

Long-term debt

Other non-current liabilities

Net assets acquired

Other liabilities

Purchase price

During the year ended December 31, 2024, we finalized the purchase price allocation of the Wavedash Acquisition upon the expiration of the one-year remeasurement period that began on the Wavedash Acquisition Date.

There were no differences between the preliminary purchase price allocation and the final purchase price allocation presented above.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

The following table sets forth the components of identifiable intangible assets acquired (in thousands) and their estimated useful lives (in years) as of the Wavedash Acquisition Date:

Estimated Useful Life

Supplier relationships

1 unchanged sentence

Acquired developed technology

Total acquired intangible assets

Acquired intangible assets

Pro forma financial information for the Wavedash Acquisition was not considered material to our consolidated financial statements and has not been presented.

On December 13, 2021 (the “Vivid Picks Acquisition Date"), we acquired 100 % ownership of Betcha (the "Vivid Picks Acquisition").

Vivid Picks Acquisition

On December 13, 2021 (the “Vivid Picks Acquisition Date“), we acquired 100 % ownership of Betcha (the “Vivid Picks Acquisition” and, together with the 2023 Acquisitions, the “Acquisitions”).

In August 2022, we rebranded Betcha as Vivid Picks.

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The Vivid Picks Acquisition was accounted for as an acquisition of a business in accordance with the acquisition method of accounting.

Acquisition costs directly related to the Vivid Picks Acquisition for the year ended December 31, 2022 were not material and are included in General and administrative expenses in the Consolidated Statements of Operations.

During the year ended December 31, 2022, we recognized an immaterial expense for direct costs incurred in relation to the Vivid Picks Acquisition, which is recorded in General and administrative expenses in the Consolidated Statements of Operations.

The Vivid Picks Acquisition Date fair value of the consideration consisted of $ 0.8 million in cash and 2.1 million shares of Class A common stock.

The total consideration included cash earnouts of $ 3.4 million as of the Vivid Picks Acquisition Date representing the estimated fair value that we would be obligated to pay if Vivid Picks met certain earnings objectives.

The cash earnouts are measured at fair value using a Monte Carlo simulation model.

The change in fair value of cash earnouts is presented in Change in fair value of contingent consideration on the Consolidated Statements of Operations.

As of December 31, 2023 the estimated fair value of cash earnouts was zero.

For the years ended December 31, 2023 and 2022, the estimated fair value of cash earnouts decreased by $ 1.0 million and $ 2.1 million, respectively.

For the years ended December 31, 2023 and 2022, we made no payments related to cash earnouts.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

In addition, the consideration included future milestone payments of $ 9.5 million as of the Vivid Picks Acquisition Date representing the estimated fair value that we would be obligated to pay upon the achievement of certain integration objectives.

For the year ended December 31, 2023, we paid milestone payments of $ 6.0 million in cash.

For the year ended December 31, 2022, we paid milestone payments which consisted of 0.3 million shares of Class A common stock and $ 1.1 million in cash.

As of December 31, 2023, the integration objectives were fully met, and we do not have future liabilities related to milestone payments.

The total consideration included cash earnouts of $ 3.4 million (the “Vivid Picks Earnouts”) as of the Vivid Picks Acquisition Date representing the estimated fair value that we would be obligated to pay if Vivid Picks met certain earnings objectives.

The Vivid Picks Earnouts are measured at fair value using a Monte Carlo simulation model.

The change in fair value of the Vivid Picks Earnouts is recorded in Change in fair value of contingent consideration in the Consolidated Statements of Operations.

As of December 31, 2024, the estimated fair value of the Vivid Picks Earnouts was zero.

For the years ended December 31, 2024, 2023, and 2022, the estimated fair value of the Vivid Picks Earnouts decreased by zero , $ 1.0 million, and $ 2.1 million , respectively.

We made no payments related to the Vivid Picks Earnouts during the years ended December 31, 2024, 2023, and 2022.

In addition, the consideration included future milestone payments of $ 9.5 million (collectively, the “Vivid Picks Milestone Payments”) as of the Vivid Picks Acquisition Date representing the estimated fair value that we would be obligated to pay upon the achievement of certain integration objectives For the years ended December 31, 2024, 2023, and 2022, we paid Vivid Picks Milestone Payments of zero , $ 6.0 million, and $ 1.1 million, respectively.

During the year ended December 31, 2022 , we also issued 0.3 million shares of Class A common stock such that the total Vivid Picks Milestone Payment consisted of $ 1.1 million cash and 0.3 million shares of Class A common stock.

As of December 31, 2023, the integration objectives were fully met and we had no further liabilities related to the Vivid Picks Milestone Payments.

As part of the Vivid Picks Acquisition , we agreed to pay cash bonuses to certain Vivid Picks employees over three years following the anniversary of the employee start date.

The payouts are subject to continued service, and therefore treated as compensation and expensed.

Pro forma financial information has not been presented as the Vivid Picks Acquisition was not considered material to our consolidated financial statements.

The consideration was allocated to the assets acquired and liabilities assumed based on their fair value as of the Vivid Picks Acquisition Date.

The excess of the purchase price over the net assets acquired was recorded as goodwill in the Marketplace segment.

The goodwill recorded is not deductible for tax purposes as the Vivid Picks Acquisition was primarily a stock acquisition and is attributable to the assembled workforce as well as the anticipated synergies from the integration of Vivid Picks' technology with our technology.

During the year ended December 31, 2022, we recognized adjustments related to the estimated fair values of the assets acquired and liabilities assumed at the Vivid Picks Acquisition Date .

The adjustments primarily consisted of $ 0.9 million in definite-lived intangible assets and $ 2.9 million in goodwill.

See Note 9, Goodwill and Intangible Assets , for the acquisition adjustment.

We have finalized acquisition accounting for the Vivid Picks Acquisition in the fourth quarter of 2022.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the Vivid Picks Acquisition Date (in thousands):

Restricted cash

Accounts receivable

Prepaid expenses and other current assets

Intangible assets

Accounts payable

Accrued expenses and other current liabilities

Net assets acquired

The following table summarizes the purchase consideration as of the Vivid Picks Acquisition Date (in thousands):

Fair value of common stock

Cash consideration

Fair value of milestone payments

Fair value of earnouts

Total purchase consideration

The following table sets forth the components of identifiable intangible assets acquired (in thousands) and their estimated useful lives (in years) as of the Vivid Picks Acquisition Date (in thousands):

Customer relationships

Acquired developed technology

Total acquired intangible assets

VIVID SEATS INC.

1 unchanged sentence

Revenue Recognition

During the years ended December 31, 2023, 2022 and 2021, Marketplace revenues consisted of the following (in thousands):

During the years ended December 31, 2024, 2023, and 2022, Marketplace revenues by business model consisted of the following (in thousands):

Years Ended December 31,

Owned Properties revenues

Private Label Offering revenues

Marketplace revenues

Owned Properties

Private Label

Total Marketplace revenues

During the years ended December 31, 2024, 2023, and 2022, Marketplace revenues consisted of the following event categories (in thousands):

Years Ended December 31,

Concert revenues

Sport revenues

Theater revenues

Other revenues

Marketplace revenues

Total Marketplace revenues

Within the Resale segment, we sell tickets we hold in inventory on resale ticket marketplaces.

Resale revenues were $ 115.5 million , $ 89.2 million , and $ 53.4 million during the years ended December 31, 2023, 2022 and 2021, respectively.

At December 31, 2023, Deferred revenue in the Consolidated Balance Sheets was $ 34.7 million , which primarily relates to our Vivid Seats Rewards loyalty program.

In our Resale segment, we primarily acquire tickets to resell on secondary ticket marketplaces, including our own.

Resale segment revenu es were $ 127.7 million, $ 115.5 million, and $ 89.2 million during the years ended December 31, 2024, 2023, and 2022, respectively.

At December 31, 2024, Deferred revenue in the Consolidated Balance Sheets was $ 23.8 million, which primarily relates to the Vivid Seats Rewards Program.

Stamps earned under the loyalty program expire in two to three years , if not converted to credits, and credits expire in two to four years , if not redeemed.

We expect to recognize all outstanding deferred revenue in the next seven years .

At December 31, 2022, $ 32.0 million was recorded as Deferred revenue, of which $ 17.6 million was recognized as revenue during the year ended December 31, 2023.

At December 31, 2021, $ 25.1 million was recorded as deferred revenue, of which $ 16.2 million was recognized as revenue during the year ended December 31, 2022.

We expect to recognize all outstanding Deferred revenue within the next seven years .

At December 31, 2023, $ 34.7 million was recorded as Deferred revenue in the Consolidated Balance Sheets, of w hich $ 25.8 million was recognized as revenue during the year ended December 31, 2024.

At December 31, 2022, $ 32.0 million was recorded as Deferred revenue in the Consolidated Balance Sheets, of which $ 17.6 million was recognized as revenue during the year ended December 31, 2023 .

Segment Reporting

Our reportable segments are Marketplace and Resale.

Through the Marketplace segment, we act as an intermediary between ticket buyers and sellers within our online ticket marketplace.

Through the Resale segment, we acquire tickets from primary sellers, which we then sell through secondary ticket marketplaces, including our own.

Revenues and contribution margin (which is defined as revenues less cost of revenues and marketing and selling expenses) are used by our CODM to assess performance of the business.

We do not report our assets, capital expenditures, general and administrative expenses or related depreciation and amortization expenses by segment, because our CODM does not use this information to evaluate the performance of our operating segments.

Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (the “CODM”) in making decisions regarding resource allocation and performance assessment.

The CODM is our Chief Executive Officer (“CEO”).

We have determined that we have two operating and reportable segments:

Marketplace and Resale.

In our Marketplace segment, we primarily act as an intermediary between ticket buyers, sellers, and partners through which we earn revenue processing ticket sales for live events and attractions and from facilitating the booking of hotel rooms and packages.

In our Resale segment, we primarily acquire tickets to resell on secondary ticket marketplaces, including our own.

The CODM evaluates the performance of the segments and allocates resources to them based on contribution margin (defined as revenues less cost of revenues and marketing and selling expenses).

Cost of revenues consists largely of payment processing fees for our Marketplace segment and ticket costs for our Resale segment.

Marketing and selling expenses, which exclusively relate to our Marketplace segment, almost exclusively consist of online and offline advertising costs.

For all segments, the CODM uses contribution margin in the annual budgeting and forecasting process, as well as when reviewing forecast-to-actual variances while making decisions about the allocation of operating and capital resources to each segment.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

We do not report assets, capital expenditures, general and administrative expenses, or depreciation and amortization expenses by segment because the CODM does not use this information to evaluate the performance of our operating segments.

The following table represents our segment information for the year ended December 31, 2024 (in thousands):

Year Ended December 31, 2024

Cost of revenues (exclusive of depreciation and amortization shown separately below)

Marketing and selling:

Total marketing and selling

Contribution margin

1 unchanged sentence

Depreciation and amortization

Change in fair value of contingent consideration

Income from operations

Interest expense – net

Other income – net

Income before income taxes

The following table represents our segment information for the year ended December 31, 2023 (in thousands):

Year Ended December 31, 2023

Cost of revenues (exclusive of depreciation and amortization shown separately below)

Marketing and selling:

Total marketing and selling

Contribution margin

4 unchanged sentences

Interest expense – net

Loss on extinguishment of debt

Other expenses

Other income – net

Income before income taxes

The following table represents our segment information for the year ended December 31, 2022 (in thousands):

Year Ended December 31, 2022

Cost of revenues (exclusive of depreciation and amortization shown separately below)

Marketing and selling:

Total marketing and selling

Contribution margin

1 unchanged sentence

Depreciation and amortization

Loss from operations

Change in fair value of contingent consideration

Income from operations

Interest expense – net

Other income – net

Loss on extinguishment of debt

Other expenses

Loss before income taxes

Substantially all of our sales occur and assets reside in the United States.

Income before income taxes

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Marketing and selling expenses primarily consist of online costs aimed towards acquiring new customers, which include paid search engine marketing, fees paid to our advertising affiliates and distributors, and other online marketing activities.

To a lesser extent, marketing and selling expenses also consist of offline costs towards acquiring new customers, which include spending on traditional media channels, advertising agency costs, and partnership expenses with teams and other media partners.

Substantially all of our sales occur and assets reside in the United States.

Accounts Receivable – Net

The following table summarizes our accounts receivable balance, net of allowance for doubtful accounts at December 31, 2023 and 2022 (in thousands):

The following table summarizes our accounts receivable balance, net of allowance for credit losses as of December 31, 2024 and 2023 (in thousands):

Uncollateralized payment processor obligations

Due from marketplace ticket sellers for cancellation charges

Due from ticket sellers for cancellation charges

Due from distribution partners for cancellation charges

Event insurance and other commissions receivable

Allowance for doubtful accounts

Total Accounts Receivable

Accounts receivable

allowance for credit losses

Accounts receivable – net

We recorded an allowance for credit losses of $ 12.0 million and $ 10.0 million at December 31, 2024 and 2023, respectively, to reflect potential challenges in collecting funds from distribution partners and ticket sellers, particularly for amounts due upon usage of store credit previously issued to buyers.

The allowance for credit losses increased during the year as certain ticket sellers on the marketplace platform generated balances in excess of their existing payables, creating a greater risk of credit losses on these receivables.

The allowance for credit losses increased during the year to reflect larger amounts due from distribution partners that are unlikely to be collected based on actual store credit usage.

Write-offs were $ 0.2 million, $ 0.3 million, and $ 4.9 million for the years ended December 31, 2024, 2023, and 2022 , respectively.

Property and Equipment

The following table summarizes our major classes of property and equipment, net of accumulated depreciation at December 31, 2023 and 2022 (in thousands):

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following at December 31, 2024 and 2023 (in thousands):

Recovery of future customer compensation

Prepaid expenses

Other current assets

Prepaid expenses and other current assets

Recovery of future customer compensation represents expected recoveries of compensation to be paid to customers for event cancellations or other service issues related to previously recorded sales transactions.

Recovery of future customer compensation costs decreased by $ 5.4 million at December 31, 2024 compared to December 31, 2023, primarily due to a decrease in estimated future cancellations driven by lower sales volumes for future events.

A related provision for expected compensation to customers is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Property and Equipment – Net

The following table summarizes our major classes of property and equipment, net of accumulated depreciation as of December 31, 2024 and 2023 (in thousands):

Computer equipment

Leasehold improvements

Total property and equipment

Construction in progress

Property and equipment

accumulated depreciation

Total property and equipment – net

Depreciation expense related to property and equipment was $ 1.4 million , $ 0.6 million and $ 0.1 million for the years ended December 31, 2023, 2022, and 2021, respectively, and is presented in Depreciation and amortization expense in the Consolidated Statements of Operations.

There were no impairment charges for the years ended December 31, 2023, 2022 and 2021.

During the years ended December 31, 2023 and 2022 we incurred a loss of $ 0.1 million and $ 0.1 million, respectively, on asset disposals related to property and equipment, which are included in General and administrative expenses in the Consolidated Statements of Operations.

There were no losses on asset disposals related to property and equipment during the year ended December 31, 2021.

On January 1, 2022, we adopted ASC 842 using a modified retrospective transition approach that allows for a cumulative-effect adjustment in the period of adoption without revising prior period presentation.

Therefore, for reporting periods beginning after December 31, 2021, our consolidated financial statements are prepared in accordance with the current lease standard (ASC 842) and we elected to present our consolidated financial statements for all periods prior to January 1, 2022 under the previous lease standard (ASC 840).

We elected the practical expedient package, which permits us to not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, and any initial direct costs for any existing leases as of the effective date.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Property and equipment – net

Depreciation expense related to property and equipment for the years ended December 31, 2024, 2023, and 2022 was $ 1.7 million, $ 1.4 million, and $ 0.6 million, respectively, all of which is recorded in Depreciation and amortization in the Consolidated Statements of Operations.

There were no impairment charges during the years ended December 31, 2024, 2023, and 2022.

In each of the years ended December 31, 2024, 2023, and 2022, we recorded an expense of $ 0.1 million for losses incurred on property and equipment-related asset disposals, which is recorded i n General and administrative expenses in the Consolidated Statements of Operations.

The following table presents the lease-related assets and liabilities in the Consolidated Balance Sheets as of December 31, 2024 and 2023 (in thousands):

Right-of-use assets – net

Current operating lease liabilities included in Accrued expenses and other current liabilities

Long-term lease liabilities

Operating lease liabilities

We entered into all of our lease contracts as a lessee.

3 unchanged sentences

None of our leases contain any material residual value guarantees or restrictive covenants.

The following table presents the lease-related assets and liabilities on the Consolidated Balance Sheets at December 31, 2023 and 2022 (in thousands):

Right-of-use assets – net

Current lease liabilities in Accrued expenses and other current liabilities

Long-term lease liabilities

Total operating lease liabilities

Most leases have one or more options to renew, with renewal terms that can initially extend the lease term for various periods up to five years .

The exercise of renewal options is at our discretion and are included if they are reasonably certain to be exercised.

The following table summarizes the weighted average remaining minimum lease term and the weighted average incremental borrowing rate at December 31, 2023 and 2022:

The following table summarizes the weighted average remaining minimum lease term and the weighted average incremental borrowing rate as of December 31, 2024 and 2023:

Weighted average remaining minimum lease term

1 unchanged sentence

In December 2021, we entered into a lease agreement for our new corporate headquarters in Chicago, Illinois.

The lease commenced in the first quarter of 2022 when we obtained control of the premises, and runs through December 31, 2033 with a five-year renewal option.

The aggregate lease payments for the initial term are approximately $ 16.2 million with no rent due until March 2024.

The lease commenced in the first quarter of 2022 when we obtained control of the premises, and runs through December

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

31, 2033 with a five-year renewal option.

The aggregate lease payments for the initial term were approximately $ 16.2 million, with no rent due until March 2024.

The lease agreement provides for a tenant improvement allowance from the landlord in an amount equal to $ 6.5 million towards the design and construction on the leased premises.

2 unchanged sentences

On the commencement date, we recognized the ROU asset and corresponding lease liability of $ 3.4 million in Right-of-use assets — net and Long-term lease liabilities, respectively, in the Consolidated Balance Sheets.

Lease expense for operating leases is recognized on a straight-line basis over the lease term and is recorded under General and administrative expenses in the Consolidated Statements of Operations.

Operating and variable lease expenses for the years ended December 31, 2023, 2022 and 2021 were $ 2.0 million , $ 3.6 million and $ 3.7 million, respectively.

Cash payments for operating lease liabilities, which are presented as a component of cash flows from operating activities within the Consolidated Statements of Cash Flows, were $ 1.2 million and $ 3.1 million during the years ended December 31, 2023 and 2022, respectively.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Future lease payments at December 31, 2023 are as follows (in thousands):

In April 2024, we amended our lease agreement to provide for the expansion of our corporate headquarters.

The amendment commenced in the fourth quarter of 2024 when we obtained control of the new premises, and runs through December 31, 2033 with a five-year renewal option.

The aggregate lease payments for the initial term are approximately $1 .5 million with no rent due until November 2025.

The lease agreement provides for a tenant improvement allowance from the landlord in an amount equal to $ 0.6 million towards the design and construction on the leased premises.

As of December 31, 2024 , we incurred leasehold improvement costs of $ 0.6 million related to the tenant improvement allowance.

This amount is recorded in Property and equipment – net in the Consolidated Balance Sheets.

On the commencement date, we recognized the ROU asset and corresponding lease liability of $ 0.3 million in Right-of-use assets — net and Long-term lease liabilities, respectively, in the Consolidated Balance Sheets.

Lease expense for operating leases is recognized on a straight-line basis over the lease term and is recorded in General and administrative expenses in the Consolidated Statements of Operations.

Operating and variable lease expenses for the years ended December 31, 2024, 2023, and 2022 were $ 3.0 m illion, $ 2.0 million, and $ 3.6 million, respectively.

Cash payments for operating lease liabilities, which are presented as a component of cash flows from operating activities within the Consolidated Statements of Cash Flows, were $ 3.4 million, $ 1.2 million, and $ 3.1 million during the years ended December 31, 2024, 2023, and 2022, respectively.

The following table summarizes the present value of our operating lease liabilities as of December 31, 2024 (in thousands):

Operating Leases

Total remaining lease payments

Total future lease payments

imputed interest

Present value of lease liabilities

Goodwill and Intangible Assets

Our goodwill is inclu ded in our Marketplace segment.

The following table summarizes the changes in the carrying amount of goodwill at December 31, 2023 and 2022 (in thousands):

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Goodwill – Net and Intangible Assets – Net

Goodwill – Net

Goodwill is inclu ded in our Marketplace segment.

The following table summarizes the changes in the carrying amount of our goodwill during the years ended December 31, 2024 and 2023 (in thousands):

Goodwill – Net

Balance at January 1, 2023

Acquisition adjustment

2023 Acquisitions (Note 3)

Foreign currency translation adjustment

Balance at December 31, 2023

Business acquisitions

Foreign currency translation

Vegas.com Acquisition (Note 3)

Foreign currency translation adjustment

Balance at December 31, 2024

We had recorded $ 377.1 million of cumulative impairment charges related to our goodwill as of December 31, 2023 and 2022.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Definite-lived intangible assets

The following table summarizes components of our definite-lived intangible assets (in thousands) and weighted average remaining life (in years) at December 31, 2023:

Goodwill is recorded net of impairment, for which we recognized $ 377.1 million of cumulative impairment charges as of December 31, 2024 and 2023.

Intangible Assets – Net

The following tables summarize the carrying amount and weighted average remaining life (in years, if applicable) of our intangible assets at December 31, 2024 and 2023 (in thousands):

Weighted Average

Remaining Life

4 unchanged sentences

Capitalized development costs

Capitalized development costs – Work in progress ("WIP")

Foreign currency translation

Capitalized development costs – work in progress

Acquired Domain Name

Foreign currency translation adjustment

Total gross book value

4 unchanged sentences

Capitalized development costs

Foreign currency translation

Acquired Domain Name

Foreign currency translation adjustment

Total accumulated amortization

Indefinite-lived intangible assets

Foreign currency translation

Foreign currency translation adjustment

Intangible assets – net

The following table summarizes components of our definite-lived intangible assets (in thousands) and weighted average remaining life (in years) at December 31, 2022:

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Weighted Average

Remaining Life

Definite-lived intangible assets

Supplier relationships

Customer relationships

1 unchanged sentence

Capitalized development costs

Capitalized development costs – work in progress

Foreign currency translation adjustment

Total gross book value

accumulated amortization

Supplier relationships

Customer relationships

1 unchanged sentence

Capitalized development costs

Foreign currency translation adjustment

Total accumulated amortization

Indefinite-lived intangible assets

Foreign currency translation adjustment

Intangible assets – net

We had recorded $ 78.7 million of cumulative impairment charges related to our trademarks as of December 31, 2023 and 2022 .

Intangible assets are recorded net of accumulated amortization (for definite-lived components) and impairment (for indefinite-lived components).

We recognized $ 78.7 million of cumulative impairment charges related to our trademarks as of December 31, 2024 and 2023.

On October 22, 2024, we acquired a domain name that we had previously licensed (the “ Acquired Domain Name ” ).

In exchange for the Acquired Domain Name, we are required to disburse monthly interest-free cash payments totaling $ 31.4 million through June 2040 (the “ Acquired Domain Name Obligation ” ).

We account for the Acquired Domain Name as a definite-lived intangible asset under ASC Topic 350, Intangibles—Goodwill and Other .

The acquisition cost of the Acquired Domain Name was $ 17.3 million, which will be amortized over a period of 15.6 years (the “ Acquired Domain Name Term ” ).

As of December 31, 2024, the Acquired Domain Name had a carrying value of $ 17.3 million, which is recorded in Intangible assets – net in the Consolidated Balance Sheets.

We account for the Acquired Domain Name Obligation as a liability for which we will accrue interest over the Acquired Domain Name Term at an effective interest rate of 8.6 % per annum.

As of December 31, 2024, the Acquired Domain Name Obligation had a carrying value of $ 17.2 million, $ 0.6 million of which is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The remaining $ 16.6 million is recorded in Other liabilities in the Consolidated Balance Sheets.

During the year ended December 31, 2024, we incurred $ 0.2 million of interest for the Acquired Domain Name Obligation, which is recorded in Interest expense – net in the Consolidated Statements of Operations.

During the year ended December 31, 2024, our intangible assets increased primarily as a result of our investments in the Acquired Domain Name and other various capitalized development costs.

Amortization expense on our definite-lived intangible assets was $ 42.4 million, $ 15.7 million, and $ 7.1 million for the years ended December 31, 2024, 2023, and 2022, respectively, which is recorded in Depreciation and amortization in the Consolidated Statements of Operations.

During the years ended December 31, 2024, 2023, and 2022, we incurred losses of $ 0.2 million, $ 0.6 million, and $ 0.3 million, respectively, on asset disposals related to our definite-lived intangible assets, which are recorded in General and administrative expenses in the Consolidated Statements of Operations.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

During the year ended December 31, 2023, intangible assets increased primarily due to the Vegas.com Acquisition, the Wavedash Acquisition and our investments in capitalized development costs.

Amortization expense on our definite-lived intangible assets was $ 15.7 million , $ 7.1 million and $ 2.3 million for the years ended December 31, 2023, 2022 and 2021, respectively, and is presented in Depreciation and amortization in the Consolidated Statements of Operations.

During the years ended December 31, 2023 and 2022, we incurred a loss of $ 0.6 million and $ 0.3 million, respectively, on asset disposals related to definite-lived intangible assets, which is included in General and administrative expenses in the Consolidated Statements of Operations.

There were no losses on asset disposals related to definite-lived intangible assets during the year ended December 31, 2021.

The estimated future amortization expense related to the definite-lived intangible assets as of December 31, 2023, except WIP, is as follows (in thousands):

Future amortization expense:

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets at December 31, 2023 and 2022 consist of the following (in thousands):

Recovery of future customer compensation

Prepaid expenses

Other current assets

Total prepaid expenses and other current assets

Recovery of future customer compensation costs increased by $ 2.4 million at December 31, 2023 compared to December 31, 2022 due to an increase in the reserve for future cancellations driven by higher volume of sales for future events .

The provision related to these expected recoveries is included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The estimated future amortization expense related to our definite-lived intangible assets (other than work in progress capitalized development costs) at December 31, 2024 is as follows (in thousands):

Definite-Lived Intangible Assets

Estimated future amortization expense

In July 2023, we invested $ 6.0 million in a privately held company in the form of a convertible promissory note (the “Note”) and a warrant to purchase up to 1,874,933 shares of the company’s stock (the “Warrant”).

1 unchanged sentence

The Warrant is exercisable until the date three years after the Note is repaid, subject to certain accelerating events.

We account for the Note in accordance with ASC 320, Investments - Debt and Equity Securities .

The Note is classified as an available-for-sale security and is recorded at fair value with the change in unrealized gains and losses reported as a separate component on the Consolidated Statements of Comprehensive Income until realized.

The Note's unrealized gain for the year ended December 31, 2023 was $ 0.2 million .

The Note's amortized cost amounted to $ 2.7 million at December 31, 2023.

We did not recognize any credit losses related to the Note during the year ended December 31, 2023.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

We account for the Warrant in accordance with ASC 815, Derivatives and Hedging , pursuant to which we record the derivative instrument on the Consolidated Balance Sheets at fair value with changes in fair value recognized in Other (income) expense on the Consolidated Statements of Operations on a recurring basis.

We account for the Note in accordance with ASC Topic 320, Investments – Debt and Equity Securities .

The Note is classified as an available-for-sale security and is recorded at fair value with the change in unrealized gains and losses recorded as a separate component in the Consolidated Statements of Comprehensive Income until realized.

The Note’s unrealized gain for the years ended December 31, 2024 and 2023 was $ 0.1 million and $ 0.2 million, respectively.

The Note’ s amortized cost was $ 3.0 million and $ 2.7 million at December 31, 2024 and 2023, respectively.

We did not recognize any credit losses related to the Note during the years ended December 31, 2024 and 2023.

We account for the Warrant in accordance with ASC 815, pursuant to which we record the derivative instrument in the Consolidated Balance Sheets at fair value with changes in fair value recorded in Other income – net in the Consolidated Statements of Operations on a recurring basis.

The classification of the derivative instrument, including whether it should be recorded as an asset or a liability, is evaluated at the end of each reporting period.

We measure our investments at fair value on recurring basis, and the balances at December 31, 2023 are as follows (in thousands):

We measure our investments in accordance with ASC 820, pursuant to which we disclose fair values as Level 1, Level 2, or Level 3 based on the fair value hierarchy.

Investments recorded at fair value on a recurring basis as of December 31, 2024 and 2023 were as follows (in thousands):

Fair Value Measurements Using

December 31, 2024

Fair Value Measurements Using

December 31, 2023

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

The fair value of the Note is determined using the income approach, utilizing Level 3 inputs.

The estimated fair value of the Warrant is determined using the Black-Scholes model, which requires us to make assumptions and judgments about the variables used in the calculation related to volatility, expected term, dividend yield and risk-free interest rate.

Because of the inherent uncertainty of valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

The following table presents quantitative information about the significant unobservable inputs applied to these Level 3 fair value measurements at December 31, 2023:

Expected terms (years)

The estimated fair value of the Warrant is determined using the Black-Scholes option pricing model, which requires us to make assumptions and judgments about the variables used in the calculation related to the expected term, the expected volatility, the risk-free rate of interest, and the expected dividend yield.

Because of the inherent uncertainty of this valuation, these estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

The following table presents quantitative information about the significant unobservable inputs applied to these Level 3 fair value measurements at December 31, 2024 and 2023:

Significant Unobservable Inputs

Expected term (years)

Implied yield

Expected terms (years)

Estimated volatility

Expected term (years)

Expected volatility

Risk-free rate

Expected dividend yield

The following table provides a reconciliation of the financial instruments measured at fair value using Level 3 significant unobservable inputs for the year ended December 31, 2023 (in thousands):

The following table summarizes the changes in the carrying amount of the Note and the Warrant (both of which are measured at fair value using Level 3 significant unobservable inputs) during the years ended December 31, 2024 and 2023 (in thousands):

Balance at July 3, 2023 (inception)

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Interest paid-in-kind

Total unrealized gains or losses:

Recognized in earnings

Recognized in Other comprehensive income (loss)

Unrealized gains:

Recognized in net income

Recognized in other comprehensive income

Total unrealized gains

Balance at December 31, 2023

Accretion of discount

Interest paid-in-kind

Unrealized gains (losses):

Recognized in net income

Recognized in other comprehensive loss

Total unrealized gains (losses)

Balance at December 31, 2024

VIVID SEATS INC.

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Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities at December 31, 2023 and 2022 consist of the following (in thousands):

Accrued expenses and other current liabilities consisted of the following at December 31, 2024 and 2023 (in thousands):

Accrued marketing expense

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Accrued future customer compensation

Accrued contingencies

Accrued payroll

1 unchanged sentence

Other current liabilities

Total accrued expenses and other current liabilities

Accrued expenses and other current liabilities

Accrued customer credits represent credits issued and outstanding for event cancellations or other service issues related to recorded sales transactions.

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Our breakage estimates could be impacted by future activity differing from our estimates, the effects of which could be material.

During the year ended December 31, 2023, $ 15.1 million of accrued customer credits were redeemed and we recognized $ 20.6 million of revenue from breakage.

During the year ended December 31, 2022, $ 24.3 million of accrued customer credits were redeemed and we recognized $ 11.5 million of revenue from breakage.

During the year ended December 31, 2021, $ 55.9 million of accrued customer credits were redeemed and we recognized $ 3.3 million of revenue from breakage.

During the years ended December 31, 2024, 2023, and 2022 , $ 18.5 million, $ 15.1 million, and $ 24.3 million of accrued customer credits were redeemed, respectively, and we recognized revenue from breakage of $ 12.2 million, $ 20.6 million, and $ 11.5 million, respectively.

Breakage amounts are net of reductions in associated accounts receivable balances.

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The expected recoveries of these obligations are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

This estimated accrual could be impacted by future activity differing from our estimates, the effects of which co uld be material.

During the years ended December 31, 2023, 2022 and 2021, we recognized a net increase in revenue of $ 0.1 million, $ 2.3 million and $ 5.1 million, respectively, from the reversals of previously recorded revenue and changes to accrued future customer compensation related to event cancellations where the performance obligations were satisfied in prior periods.

Accrued future customer compensation increased by $ 2.8 million due to an increase in the estimated rate of future cancellations as of December 31, 2023.

Accrued contingencies decreased as a result of Betcha milestone payments of $ 6.0 million in cash during the year ended December 31, 2023.

Other current liabilities primarily increased as a result of adding accrued expenses for Vegas.com vendors, an increase in the liability for uncollected local admissions taxes and higher accrued interest.

The expected recoveries of these obligations are recorded in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

This estimated accrual could be impacted by future activity differing from our estimates, the effects of which could be material.

During the years ended December 31, 2024, 2023, and 2022, we recognized a net increase in revenue of $ 1.1 mi llion, $ 0.1 million, and $ 2.3 million, respectively, from the reversals of previously recorded revenue and changes to accrued future customer compensation related to event cancellations where the performance obligations were satisfied in prior periods.

During the years ended December 31, 2024 and 2023, accrued future customer compensation decreased by $ 6.4 million and increased by $ 2.8 million, respectively, due to a decrease in the estimated rate of future cancellations as of December 31, 2024 and an increase in the estimated rate of future cancellations as of December 31, 2023 .

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Our outstanding debt at December 31, 2023 and 2022 consisted of the following (in thousands):

February 2022 First Lien Loan

Long-Term Debt – Net

The following table summarizes our long-term debt, net of unamortized debt issuance costs and current maturities as of December 31, 2024 and 2023 (in thousands):

2022 First Lien Loan

Shoko Chukin Bank Loan

Total long-term debt, gross

2024 First Lien Loan

Outstanding debt

unamortized debt issuance costs

Total long-term debt, net of issuance costs

current portion

Total long-term debt, net

June 2017 Term Loans

On June 30, 2017, we entered into a $ 575.0 million first lien debt facility, comprising a $ 50.0 million revolving credit facility and a $ 525.0 million term loan (the “June 2017 First Lien Loan”), and a second lien credit facility, comprising a $ 185.0 million second lien term loan (the “June 2017 Second Lien Loan”).

The June 2017 First Lien Loan was amended to upsize the committed amount by $ 115.0 million on July 2, 2018.

On October 28, 2019 , we paid off the June 2017 Second Lien Loan balance.

The revolving credit facility component of the first lien debt facility was retired on May 22, 2020.

On October 18, 2021, we made an early principal payment related to the June 2017 First Lien Loan of $ 148.2 million in connection with, and using the proceeds from, the Merger Transaction and the PIPE Financing.

On February 3, 2022, we repaid the outstanding balance of $ 190.7 million from the June 2017 First Lien Loan and refinanced the remaining balance with a new $ 275.0 million term loan.

February 2022 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 new $ 275.0 million term loan (the "February 2022 First Lien Loan"), which has a maturity date of February 3, 2029, and added a new $ 100.0 million revolving credit facility (the “Revolving Facility”) with a maturity date of February 3, 2027.

At December 31, 2023, we had no outstanding borrowings under the Revolving Facility.

The terms of the February 2022 First Lien Loan specify a secured overnight financing rate (“SOFR”)-based floating interest rate and contain a springing financial covenant that requires compliance with a first lien net leverage ratio when revolver borrowings exceed certain levels.

All obligations under the February 2022 First Lien Loan are unconditionally guaranteed by Hoya Intermediate and substantially all of Hoya Intermediate’s existing and future direct and indirect wholly owned domestic subsidiaries.

The February 2022 First Lien Loan requires quarterly amortization payments of $ 0.7 million.

Long-term debt

current maturities of long-term debt

Long-term debt – net

2017 Term Loans

In June 2017, we entered into a $ 575.0 million first lien debt facility comprising a $ 50.0 million revolving credit facility and a $ 525.0 million term loan (the “2017 First Lien Loan”), and a second lien credit facility comprising a $ 185.0 million second lien term loan (the “2017 Second Lien Loan” and, together with the 2017 First Lien Loan, the “2017 Term Loans”).

In July 2018, we amended the 2017 First Lien Loan to upsize the committed amount by $ 115.0 million.

In October 2019 , we repaid the 2017 Second Lien Loan in its entirety.

The revolving credit facility component of the first lien debt facility was retired in May 2020.

In October 2021, we made an early principal payment related to the 2017 First Lien Loan of $ 148.2 million in connection with, and using the proceeds from, the Merger Transaction and the PIPE Financing.

On February 3, 2022, we repaid $ 190.7 million of the 2017 First Lien Loan and refinanced the remaining balance with a new $ 275.0 million term loan (as discussed in the “2022 First Lien Loan” section below).

2022 First Lien Loan

On February 3, 2022, we amended the June 2017 First Lien Loan to refinance the remaining balance with a new $ 275.0 million term loan (the “2022 First Lien Loan”), which had an original maturity date of February 3, 2029 , and added a $ 100.0 million revolving credit facility (the “Revolving Facility”) with a maturity date of February 3, 2027.

The terms of the 2022 First Lien Loan specified a secured overnight financing rate (“SOFR”)-based floating interest rate and contain a springing financial covenant that requires compliance with a first lien net leverage ratio when revolver borrowings exceed certain levels.

All obligations under the 2022 First Lien Loan were unconditionally guaranteed by Hoya Intermediate and substantially all of Hoya Intermediate’ s existing and future direct and indirect wholly owned domestic subsidiaries (collectively, the “Guarantors”).

The 2022 First Lien Loan required quarterly amortization payments of $ 0.7 million.

The Revolving Facility does not require periodic payments.

All obligations under the February 2022 First Lien Loan are secured, subject to permitted liens and other exceptions, by first-priority perfected security interests in substantially all of our assets.

The February 2022 First Lien Loan carries an interest rate of SOFR (subject to a 0.5 % floor) plus 3.25 %.

The effective interest rate on the February 2022 First Lien Loan was 9.05 % and 7.98 % per annum at December 31, 2023 and 2022, respectively.

The February 2022 First Lien Loan is held by third-party financial institutions and is carried at the outstanding principal balance, less debt issuance costs and any unamortized discount or premium.

The fair value was estimated using quoted prices that are directly observable in the marketplace.

Therefore, the fair value is estimated on a Level 2 basis.

At December 31, 2023 and 2022, the fair value of the February 2022 First Lien Loan approximated the carrying value.

We are subject to certain reporting and compliance-related covenants to remain in good standing under the February 2022 First Lien Loan.

All obligations under the 2022 First Lien Loan were secured, subject to permitted liens and other exceptions, by first-priority perfected security interests in substantially all of our and the Guarantors ’ assets.

The 2022 First Lien Loan carried an interest rate of SOFR (subject to a 0.5 % floor) plus a margin of 3.25 %.

The effective interest rate on the 2022 First Lien Loan was 9.05 % per annum at December 31, 2023.

The 2022 First Lien Loan was held by third-party financial institutions and was carried at the outstanding principal balance, less debt issuance costs and any unamortized discount or premium.

Because the fair value was estimated using quoted prices that were directly observable in the marketplace, it was estimated on a Level 2 basis.

At December 31, 2023, the fair value of the 2022 First Lien Loan approximated its carrying value.

We were subject to certain reporting and compliance-related covenants to remain in good standing under the 2022 First Lien Loan.

These covenants, among other things, limited our ability to incur additional indebtedness and, in certain circumstances, to enter into transactions with affiliates, create liens, merge or consolidate, and make certain

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Non-compliance with these covenants and failure to remedy could have resulted in the acceleration of the loans or foreclosure on the collateral.

As of December 31, 2023, we were in compliance with all debt covenants related to the 2022 First Lien Loan and had no outstanding borrowings under the Revolving Facility .

During the year ended December 31, 2022, we recognized an expense of $ 4.3 million for losses incurred in relation to the refinancing of the 2017 First Lien Loan with the 2022 First Lien Loan, which is recorded in Loss on extinguishment of debt in the Consolidated Statements of Operations.

On June 14, 2024, we refinanced the remaining $ 269.5 million balance of the 2022 First Lien Loan with a new $ 395.0 million term loan (as discussed in the “2024 First Lien Loan” section below).

Shoko Chukin Bank Loan

In connection with the Wavedash Acquisition, we assumed the Shoko Chukin Bank Loan of JPY 458.3 million (approximately $ 3.1 million), which had an original maturity date of June 24, 2026 and was subject to a fixed interest rate of 1.27 % per annum.

The Shoko Chukin Bank Loan was held by third-party financial institutions and was carried at the outstanding principal balance, less debt issuance costs and any unamortized discount or premium.

Because the fair value was estimated using quoted prices that are directly observable in the marketplace, it was estimated on a Level 2 basis.

At December 31, 2023, the fair value of the Shoko Chukin Bank Loan approximated its carrying value.

On April 4, 2024, we paid off the Shoko Chukin Bank Loan balance in its entirety.

2024 First Lien Loan

On June 14, 2024, we amended the 2022 First Lien Loan to refinance the remaining balance with a new $ 395.0 million term loan (the “2024 First Lien Loan”), which has a maturity date of February 3, 2029 .

The Revolving Facility was not impacted by the refinancing of the 2022 First Lien Loan with the 2024 First Lien Loan.

The terms of the 2024 First Lien Loan specify a SOFR-based floating interest rate and contain a springing financial covenant that requires compliance with a first lien net leverage ratio when revolver borrowings exceed certain levels.

All obligations under the 2024 Lien Loan are unconditionally guaranteed by the Guarantors.

The 2024 First Lien Loan requires quarterly amortization payments of $ 1.0 million.

All obligations under the 2024 First Lien Loan are secured, subject to permitted liens and other exceptions, by first-priority perfected security interests in substantially all of our and the Guarantors’ assets.

The 2024 First Lien Loan carries an interest rate of SOFR (subject to a 0.5 % floor) plus a margin of 3.00 % ;

provided that such margin may be reduced to 2.75 % if the corporate rating assigned to us by Moody’s Investors Service, Inc.

and S&P Global Ratings is at least Ba3/BB- (in each case, stable or better).

The effective interest rate on the 2024 First Lien Loan was 7.89 % per annum at December 31, 2024.

The 2024 First Lien Loan is held by third-party financial institutions and is carried at the outstanding principal balance, less debt issuance costs and any unamortized discount or premium.

Because the fair value was estimated using quoted prices that are directly observable in the marketplace, it is estimated on a Level 2 basis.

At December 31, 2024, the fair value of the 2024 First Lien Loan approximated its carrying value.

We are subject to certain reporting and compliance-related covenants to remain in good standing under the 2024 First Lien Loan.

These covenants, among other things, limit our ability to incur additional indebtedness and, in certain circumstances, to enter into transactions with affiliates, create liens, merge or consolidate, and make certain payments.

Non-compliance with these covenants and failure to remedy could result in the acceleration of the loans or foreclosure on the collateral.

As of December 31, 2023, we were in compliance with all debt covenants related to the February 2022 First Lien Loan.

As of December 31, 2024 , we were in compliance with all debt covenants related to the 2024 First Lien Loan and had no outstanding borrowings under the Revolving Facility.

The refinancing of the 2022 First Lien Loan with the 2024 First Lien Loan was accounted for as a debt modification (the “First Lien Loan Modification”).

During the year ended December 31, 2024, we recognized an expense of $ 1.7 million for third-party fees incurred in relation to the First Lien Loan Modification, which is recorded in Other income – net in the Consolidated Statements of Operations.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Due to the refinancing of the June 2017 First Lien Loan with the February 2022 First Lien Loan, we incurred a loss of $ 4.3 million for the year ended December 31, 2022, which is presented in Loss on extinguishment of debt in the Consolidated Statements of Operations.

Shoko Chukin Bank Loan

In connection with our acquisition of Wavedash, we assumed long-term debt of JPY 458.3 million (approximately $ 3.1 million), which has a maturity date of June 24, 2026, and is subject to a fixed interest rate of 1.27 % per annum.

The fair value was estimated using quoted prices that are directly observable in the marketplace.

Therefore, the fair value is estimated on a Level 2 basis.

At December 31, 2023 the fair value of our Shoko Chukin Bank Loan approximated the carrying value.

Future maturities of our outstanding debt, excluding interest, as of December 31, 2023 were as follows (in thousands):

On February 5, 2025, we amended the 2024 First Lien Loan to reprice all $ 393.0 million of the then-outstanding balance.

See Note 23, Subsequent Events , for more information.

Future Maturities of Outstanding Debt

The following table summarizes the future maturities of our outstanding debt, which entirely consists of the 2024 First Lien Loan, as of December 31, 2024 (in thousands):

2024 First Lien Loan

Future maturities of outstanding debt

Employee Benefit Plan

We have a defined contribution and profit-sharing 401(k) plan that covers substantially all employees who meet eligibility requirements.

Participants may contribute to the plan, through regular payroll deductions, an amount subject to limitations imposed by the Internal Revenue Service (the "IRS").

Participants may contribute to the plan, through regular payroll deductions, an amount subject to limitations imposed by the Internal Revenue Service.

The plan also provides for discretionary profit-sharing contributions and matching contributions.

We contributed approximately $ 1.6 million, $ 1.3 million and $ 0.8 million in matching contributions for the years ended December 31, 2023, 2022 and 2021, respectively.

Matching contributions expense is included in General and administrative expense in the Consolidated Statements of Operations.

We contributed appro ximately $ 2.2 million, $ 1.6 million, and $ 1.3 million in matching contributions for the years ended December 31, 2024, 2023, and 2022, respectively, which is recorded in General and administrative expenses in the Consolidated Statements of Operations.

For the years ended December 31, 2024, 2023, and 2022 , there were no discretionary profit-sharing contributions.

Financial Instruments

The financial instruments entered into by us are typically executed over-the-counter.

All financial instruments are measured at fair value on a recurring basis.

The fair value is derived from discounted cash flows adjusted for nonperformance risk.

The fair value models primarily use market observable inputs and, therefore, are classified as Level 2 assets.

These models incorporate a variety of factors, including, where applicable, maturity, interest rate yield curves, and counterparty credit risks.

The credit valuation adjustment associated with the derivatives, related to the likelihood of default by us and the counterparty, was not significant to the overall valuation.

Interest Rate Cap

On November 26, 2018, we paid $ 1.0 million to enter into an interest rate cap with an effective date of September 30, 2020 (the "Interest Rate Cap").

The notional value of the Interest Rate Cap was $ 516.8 million on September 30, 2021.

The Interest Rate Cap matured on September 30, 2021.

The Interest Rate Cap had a strike rate of 3.5 %.

The Interest Rate Cap was purchased to reduce a portion of the exposure to fluctuations in LIBOR interest rates associated with our variable-rate term loan.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

The objective in using the Interest Rate Cap was to add stability to interest expense and to manage the exposure to interest rate movements.

Interest rate caps involve the borrower paying the hedge provider an initial one-time fee in exchange for the hedge provider paying the borrower the excess of the floating interest rate payment above a strike rate, in the event that the floating interest rate is greater than the strike rate during the period between the effective date and maturity date.

We performed a regression analysis at the inception of the hedging relationship to assess the effectiveness.

The design of this analysis addressed the effectiveness of the hedging relationship by considering how the hedge instrument performs against the forecasted transaction or hypothetical interest rate cap over historical months.

Historical changes in the fair value of the hedge instrument and the underlying item demonstrated the effectiveness of the hedging relationship.

On an ongoing basis, we assess hedge effectiveness prospectively and retrospectively.

The hedge continued to be highly effective through its maturity.

Effect of Derivative Contracts on Accumulated Other Comprehensive Income (Loss) ("AOCL") and Earnings

Since we designated the Interest Rate Cap as an effective cash flow hedge that qualifies for hedge accounting, net interest payments were recorded in Interest expense – net in the Consolidated Statements of Comprehensive Income (Loss), and unrealized gains or losses resulting from adjusting the financial instruments to fair value are recorded as a component of Other comprehensive loss and subsequently reclassified into earnings in the same period during which the hedged transaction affects earnings.

During the year ended December 31, 2021, we reclassified losses of $ 0.8 million into Interest expense – net from AOCL related to the Interest Rate Cap.

Cash flows resulting from settlements are presented as a component of cash flows from operating activities within the Consolidated Statements of Cash Flows.

The following table presents the effects of the Interest Rate Cap hedge accounting on AOCL for the year ended December 31, 2021 (in thousands):

Interest rate cap

Beginning accumulated derivative loss in AOCL

Amount of gain (loss) recognized in AOCL

Amount of loss reclassified from AOCL to income

Ending accumulated derivative loss in AOCL

We issued the following warrants during the year ended December 31, 2021 in connection with the Merger Transaction:

Public Warrants

W e issued to former warrant holders of Horizon Public Warrants to purchase 18,132,776 shares of Class A common stock at an exercise price of $ 11.50 per share, of which Public Warrants to purchase 5,166,666 shares of Class A common stock were issued to Horizon Sponsor.

The Public Warrants are traded on the Nasdaq Stock Market ("Nasdaq") under the symbol “SEATW.”

In connection with the Merger Transaction, we issued to former Horizon warrant holders Public Warrants to purchase 18,132,776 shares of Class A common stock at an exercise price of $ 11.50 per share, 5,166,666 of which were issued to Horizon Sponsor.

The Public Warrants are traded on the Nasdaq Global Select Market under the symbol “SEATW.”

On May 26, 2022, we announced the commencement of an offer to the holders of outstanding Public Warrants to receive 0.24 shares of Class A common stock in exchange for each properly tendered outstanding Public Warrant (the “Offer”).

2 unchanged sentences

During the year ended December 31, 2022, 10 Public Warrants were exercised.

The exercise of the Public Warrants are accounted for as a transaction within Additional paid-in capital in the Consolidated Balance Sheets.

As of December 31, 2023, there were 6,766,853 o utstanding Public Warrants.

The exercise of the Public Warrants is accounted for as an equity transaction and is recorded in Additional paid-in capital in the Consolidated Balance Sheets.

As of December 31, 2024, there w ere 6,766,853 Public Warrants outstanding.

We may, in our sole discretion, reduce the exercise price of the Public Warrants to induce early exercise, provided that we provide at least five days’ advance notice.

The exercise price and number of shares of Class A common stock

The exercise price and number of shares of Class A common stock issuable upon exercise of the Public Warrants may also be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger, or consolidation.

In no event are we required to net cash settle the Public Warrants.

The Public Warrants became exercisable 30 days following the Merger Transaction and expire at the earliest of the date that is five years following the Merger Transaction, the date of our liquidation, or the date of our optional redemption thereof provided that the value of the Class A common stock exceeds $ 18.00 per share.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

issuable upon exercise of the Public Warrants may also be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation.

In no event are we required to net cash settle the Public Warrants.

The Public Warrants became exercisable 30 days following the Merger Transaction and expire at the earliest of five years following the Merger Transaction, our liquidation or the date of our optional redemption thereof provided that the value of the Class A common stock exceeds $ 18.00 per share.

There is an effective registration statement and prospectus relating to the shares of Class A common stock issuable upon exercise of the Public Warrants.

effective registration statement and prospectus relating to the shares of Class A common stock issuable upon exercise of the Public Warrants.

Under certain circumstances, we may elect to redeem the Public Warrants at a redemption price of $ 0.01 per Public Warrant at any time during the term of the Public Warrants in which the trading price of the Class A common stock has been at least $ 18.00 per share for 20 trading days within a 30 trading-day period.

1 unchanged sentence

Any Public Warrants not exercised within that 30-day period will be redeemed pursuant to this provision.

As part of the Merger Transaction, we modified the terms of the Public Warrants.

The modification resulted in a transfer of incremental value of $ 1.3 million to the holders of the Public Warrants, which we recorded as Other expenses in the Consolidated Statements of Operations during the year ended December 31, 2021.

Private Warrants

We issued to Horizon Sponsor Private Warrants to purchase 6,519,791 shares of Class A common stock at an exercise price of $ 11.50 per share.

The Private Warrants have similar terms to the Public Warrants, except that they are not redeemable by us.

As of December 31, 2023, there were 6,519,791 outstanding Private Warrants.

In connection with the Merger Transaction, we issued to Horizon Sponsor Private Warrants to purchase 6,519,791 shares of Class A common stock at an exercise price of $ 11.50 per share.

The Private Warrants have similar terms to the Public Warrants, with the most notable difference relating to the fact that we are unable to redeem the Private Warrants.

As of December 31, 2024, there were 6,519,791 Private Warrants outstanding.

As part of the Merger Transaction, we modified the terms of the Private Warrants.

1 unchanged sentence

Exercise Warrants

We issued to Horizon Sponsor (i) $ 10 Exercise Warrants to purchase 17.0 million shares of Class A common stock at an exercise price of $ 10.00 per share and (ii) $ 15 Exercise Warrants to purchase 17.0 million shares of Class A common stock at an exercise of $ 15.00 per share.

In connection with the Merger Transaction, we issued to Horizon Sponsor (i) $ 10 Exercise Warrants to purchase 17,000,000 shares of Class A common stock at an exercise price of $ 10.00 per share and (ii) $ 15 Exercise Warrants to purchase 17,000,000 shares of Class A common stock at an exercise of $ 15.00 per share.

The Exercise Warrants have similar terms to the Public Warrants, except that they have different exercise prices, an initial term of 10 years , are not redeemable by us and are fully transferable.

As of December 31, 2023, there were outstanding 17.0 million $ 10 Exercise Warrants and 17.0 million $ 15 Exercise Warrants.

As of December 31, 2024 , there were 34,000,000 Exercise Warrants outstanding (comprised of 17,000,000 $ 10 Exercise Warrants and 17,000,000 $ 15 Exercise Warrants).

Mirror Warrants

Hoya Intermediate issued to us warrants to purchase 17.0 million Intermediate Units at an exercise price of $ 10.00 per unit (the “$ 10 Mirror Warrants”), warrants to purchase 17.0 million Intermediate Units at an exercise of $ 15.00 per unit (the “$ 15 Mirror Warrants”), warrants to purchase 24,652,557 Intermediate Units at an exercise price of $ 11.50 per unit (the “$ 11.50 Mirror Warrants” and, together with the $ 10 Mirror Warrants and the $ 15 Mirror Warrants, the “Mirror Warrants”).

The number and terms of the Mirror Warrants are identical to the Public Warrants, the Private Warrants and the Exercise Warrants, respectively.

Upon the valid exercise of a Public Warrant, Private Warrant or Exercise Warrant, Hoya Intermediate will issue to us an equivalent number of Intermediate Units.

Similarly, if a Public Warrant, Private Warrant or Exercise Warrant is tendered, an equivalent number of Mirror Warrants will be tendered.

In connection with the Merger Transaction, Hoya Intermediate issued to us warrants to purchase 17,000,000 Intermediate Units at an exercise price of $ 10.00 per unit (the “$ 10 Mirror Warrants”), warrants to purchase 17,000,000 Intermediate Units at an exercise of $ 15.00 per unit (the “$ 15 Mirror Warrants”), warrants to purchase 24,652,557 Intermediate Units at an exercise price of $ 11.50 per unit (the “$ 11.50 Mirror Warrants” and, together with the $ 10 Mirror Warrants and the $ 15 Mirror Warrants, the “Mirror Warrants”).

The number and terms of the Mirror Warrants are identical to the Public, Private, and Exercise Warrants.

Upon the valid exercise of a Public, Private, or Exercise Warrant, Hoya Intermediate will issue to us an equivalent number of Intermediate Units.

Similarly, if a Public, Private, or Exercise Warrant is tendered, an equivalent number of Mirror Warrants will be tendered.

In connection with the Exchange, we tendered 11,365,913 $ 11.50 Mirror Warrants and received 2,727,785 Intermediate Units.

As of December 31, 2023, there were outstanding 17.0 million $ 10 Mirror Warrants, 17.0 million $ 15 Mirror Warrants and 13,286,644 $ 11.50 Mirror Warrants.

As of December 31, 2024 , there were 47,286,644 Mirror Warrants outstanding (comprised of 17,000,000 $ 10 Mirror Warrants, 17,000,000 $ 15 Mirror Warrants, and 13,286,644 $ 11.50 Mirror Warrants).

Because the Public, Private, and Exercise Warrants are indexed to our equity and meet the equity classification guidance of ASC Topic 815-40, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, they are accounted for as a component of Shareholders' equity and recorded in Additional paid-in capital in the Consolidated Balance Sheets.

The Mirror Warrants eliminate in consolidation and do not impact the presentation of our consolidated financial statements.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

As the Public Warrants, the Private Warrants and the Exercise Warrants are indexed to our equity and meet the equity classification guidance of ASC 815-40, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, we reflect these warrants as a component of equity within additional paid-in capital.

The Mirror Warrants eliminate in consolidation and do not impact the presentation of our consolidated financial statements.

Hoya Intermediate Warrants

Hoya Intermediate issued to Hoya Topco 3.0 million $ 10 Hoya Intermediate Warrants and 3.0 million $ 15 Hoya Intermediate Warrants, which are classified as Other Liabilities in the Consolidated Balance Sheets.

A portion of the Hoya Intermediate Warrants, consisting of the Option Contingent Warrants to purchase 1.0 million Intermediate Units at exercise prices of $ 10.00 and $ 15.00 per unit, respectively, were issued in tandem with Management Options we issued to members of our management team.

The Option Contingent Warrants only become exercisable by Hoya Topco if a Management Option is forfeited or expires unexercised.

Upon the valid exercise of a Hoya Intermediate Warrant for Intermediate Units, we will issue an equivalent number of shares of Class B common stock to Hoya Topco.

As of December 31, 2022, 0.2 million Management Options had been forfeited.

Because the Hoya Intermediate Warrants allow for cash redemption at the option of the warrant holder, they are classified as a liability in Other liabilities on the Consolidated Balance Sheets.

Upon consummation of the Merger Transaction, we recorded a warrant liability of $ 20.4 million reflecting the fair value of the Hoya Intermediate Warrants determined using the Black-Scholes model.

Upon consummation of the Merger Transaction, the fair value of the Hoya Intermediate Warrants included Option Contingent Warrants of $ 1.6 million.

The estimated fair value of the Option Contingent Warrants was adjusted to reflect the probability of forfeiture of the Management Options based on historical forfeiture rates for Hoya Topco profit interests.

On December 7, 2023, Hoya Topco voluntarily terminated a portion of the Hoya Intermediate Warrants, consisting of Option Contingent Warrants to purchase 1.0 million Intermediate Units at exercise prices of $ 10.00 and $ 15.00 per unit, respectively.

Immediately before such termination the fair value of the Option Contingent Warrants liability was determined using the Black-Scholes m odel and was estimated at $ 1.1 million.

Upon termination, we recorded a reduction in this liability to zero, along with an increase in Redeemable noncontrolling interests.

As of December 31, 2023, there were outstanding 2.0 million $ 10 Hoya Intermediate Warrants and 2.0 million $ 15 Hoya Intermediate Warrants.

The following assumptions were used to calculate the fair value of the Hoya Intermediate Warrants at:

December 31, 2023

December 7, 2023

December 31, 2022

Estimated volatility

Intermediate Warrants

In connection with the Merger Transaction, Hoya Intermediate issued to Hoya Topco (i) $ 10 Intermediate Warrants to purchase 3,000,000 Intermediate Units at an exercise price of $ 10.00 per unit and (ii) $ 15 Intermediate Warrants to purchase 3,000,000 Intermediate Units at an exercise price of $ 15.00 per unit .

A portion of the Intermediate Warrants (the Option Contingent Warrants, which consisted of 1,000,000 $ 10 Intermediate Warrants and 1,000,000 $ 15 Intermediate Warrants) were issued in tandem with the Management Options that we issued to members of our management team and would only become exercisable by Hoya Topco if a Management Option was forfeited or expired unexercised.

Because the Intermediate Warrants allow for cash redemption at the option of the warrant holder, they are recorded in Other liabilities in the Consolidated Balance Sheets.

Upon consummation of the Merger Transaction, the fair value of the Intermediate Warrants was determined using the Black-Scholes model and estimated at $ 20.4 million (including $ 1.6 million of Option Contingent Warrants), for which we recorded a warrant liability.

On December 7, 2023, Hoya Topco voluntarily terminated all 2,000,000 of the Option Contingent Warrants.

Immediately before such termination, the fair value of the liability related to the Option Contingent Warrants was determined using the Black-Scholes m odel and estimated at $ 1.1 million.

Upon termination, this liability was reduced to zero, with an equivalent increase recorded to Redeemable noncontrolling interests.

As of December 31, 2024, there were 4,000,000 Intermediate Warrants outstanding (comprised of 2,000,000 $ 10 Intermediate Warrants and 2,000,000 $ 15 Intermediate Warrants).

The following assumptions were used to calculate the fair value of the Intermediate Warrants at December 31, 2024 and 2023:

Expected term (years)

Expected volatility

Risk-free rate

Expected dividend yield

For the year ended December 31, 2023, the fair value of the Hoya Intermediate Warrants decreased by $ 1.0 million, which is presented in Other (income) expense on the Consolidated Statements of Operations.

For the year ended December 31, 2022, the fair value of the Hoya Intermediate Warrants and the Option Contingent Warrants decreased by $ 8.2 million, which is presented in Other (income) expense on the Consolidated Statements of Operations.

For the period fro m October 18, 2021 until December 31, 2021, we recognized a charge to Other (income) expense on the Consolidated Statements of Operations resulting from an increase in the fair value of the Hoya Intermediate Warrants and the Option Contingent Warrants of $ 0.1 million.

For the years ended December 31, 2024 and 2023, the fair value of the Intermediate Warrants decreased by $ 4.0 million and $ 1.0 million, respectively.

For the year ended December 31, 2022, the fair value of the Intermediate Warrants (including the Option Contingent Warrants) decreased by $ 8.2 million.

The change in fair value of the Intermediate Warrants (including, for the year ended December 31, 2022, the Option Contingent Warrants) is recorded in Other income – net in the Consolidated Statements of Operations.

Upon the valid exercise of an Intermediate Warrant for Intermediate Units, we will issue an equivalent number of shares of our Class B common stock to Hoya Topco.

Redeemable noncontrolling Interests

As of December 31, 2024, Hoya Topco held 100 % of our Class B common stock and 36.6 % o f the Intermediate Units, representing a redeemable noncontrolling interest in VSI.

At its sole discretion, Hoya Topco has the right to exchange its Intermediate Units for shares of our Class A common stock on a one-to-one basis or for cash proceeds of equal value at the time of redemption .

If Hoya Topco elects the redemption to be settled in cash:

(i) the cash used to settle the redemption must be funded through a private or public offering of our Class A common stock;

and (ii) the redemption must be approved by our Board of Directors (our “Board”).

Net income attributable to redeemable noncontrolling interests is calculated by multiplying Hoya Intermediate’s net income incurred in the period by Hoya Topco’s weighted average percentage allocation of Intermediate Units during the period.

See Note 22, Earnings per Share , for computation of net income attributable to redeemable noncontrolling interests.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Redeemable noncontrolling Interests

As of December 31, 2023, Hoya Topco held 100 % of the Class B common stock and 36.3 % of the Intermediate Units, representing a redeemable noncontrolling interest in VSI.

Hoya Topco has the right to exchange its Intermediate Units for shares of VSI’s Class A common stock on a one-to-one basis or for cash proceeds of equal value at the time of redemption.

The ability to exchange Intermediate Units for shares of Class A common stock is solely within the control of Hoya Topco.

The option to redeem Intermediate Units for cash proceeds must be approved by VSI's Board of Directors (the "Board"), which as of December 31, 2023 consisted of a majority of directors nominated by affiliates of Hoya Topco and GTCR, LLC pursuant to our stockholders’ agreement.

The ability to put the Intermediate Units is solely within the control of the holder of the redeemable noncontrolling interest.

If Hoya Topco elects the redemption to be settled in cash, the cash used to settle the redemption must be funded through a private or public offering of Class A common stock and is subject to the Board's approval.

Net income (loss) attributable to redeemable noncontrolling interests is calculated by multiplying Hoya Intermediate's net income (loss) incurred in the period by Hoya Topco's weighted average percentage allocation of Intermediate Units during the period.

See Note 22, Earnings per Share , for computation of net income (loss) attributable to redeemable noncontrolling interests.

For periods prior to the Merger Transaction, Hoya Intermediate had Senior Preferred Units, Preferred Units and Common Units, described below, authorized, issued and outstanding.

Subsequent to the Merger Transaction, VSI has two classes of common stock authorized and issued:

Class A common stock and Class B common stock.

Hoya Intermediate Senior Preferred Units, Preferred Units, and Common Units

Prior to the Merger Transaction, Hoya Intermediate had authorized and issued 100 units of Redeemable Senior Preferred Units, 100 units of Redeemable Preferred Units and 100 common units.

In connection with the Merger Transaction, the Senior Preferred Units and the Preferred Units were redeemed and no longer remain outstanding.

As of December 31, 2023, 210,100,814 Intermediate Units are outstanding, equivalent to the total number of shares of Class A and Class B common stock outstanding (net of treasury stock).

VSI holds 63.7 % of the outstanding Intermediate Units as of December 31, 2023, with the remainder held by Hoya Topco.

VSI Class A Common Stock

Holders of Class A common stock are entitled to full economic rights in VSI, including the right to receive dividends when and if declared by the Board, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Hoya Intermediate

Subsequent to the Merger Transaction, Hoya Intermediate has Intermediate Units authorized, issued, and outstanding.

Intermediate Units

As of December 31, 2024, 208,170,326 Intermediate Units were outstanding, which is equivalent to the total number of shares of our Class A common stock and Class B common stock outstanding, net of treasury stock.

VSI holds 63.4 % of the outstanding Intermediate Units as of December 31, 2024, with the remaining 36.6 % representing the redeemable noncontrolling interest held by Hoya Topco.

Subsequent to the Merger Transaction, VSI has Class A common stock and Class B common stock authorized, issued, and outstanding.

Class A Common Stock

Holders of Class A common stock are entitled to full economic rights in VSI, including the right to receive dividends when and if declared by our Board, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock.

Each holder of Class A common stock is entitled to one vote for each share held.

VSI Class B Common Stock

Class B Common Stock

Holders of Class B common stock are entitled to one vote for each share held but do not have economic rights in VSI.

However, holders of Class B common stock receive one Intermediate Unit for each share, entitling them to economic rights in our operating entity, Hoya Intermediate (see Note 16, Redeemable Noncontrolling Interest ).

Holders of Class A common stock and Class B common stock vote as a single class on all matters requiring a shareholder vote.

Following the Merger Transaction, the number of shares of Class A common stock and Class B common stock outstanding, net of treasury stock, is equal to the quantity of Intermediate Units outstanding.

Share Repurchase Program

On May 25, 2022, the Board authorized a share repurchase program for up to $ 40.0 million of Class A common stock (the "Repurchase Program").

The Repurchase Program was announced on May 26, 2022 and its authorization was fully utilized during 2022 and the three months ended March 31, 2023.

As of December 31, 2023 and 2022, we have repurchas ed 5.3 million shares of Class A common stock for $ 40.0 million a nd 4.3 million shares of Class A common stock for $ 32.5 million, respectively.

The share repurchases are accounted for as Treasury stock in the Consolidated Balance Sheets.

Share Repurchases

On May 25, 2022, our Board authorized a share repurchase program for up to $ 40.0 million of our Class A common stock (the “2022 Share Repurchase Program”).

The 2022 Share Repurchase Program was announced on May 26, 2022 and its authorization was fully utilized during the year ended December 31, 2022 and the three months ended March 31, 2023.

As of December 31, 2023 and 2022, we repurchas ed approximately 5.3 million shares of our Class A common stock for approximately $ 40.0 million a nd approximately 4.3 million shares of our Class A common stock for approximately $ 32.5 million, respectively, under the 2022 Share Repurchase Program, for which we recorded approximately $ 0.1 million in commissions and excise taxes.

Pursuant to the underwriting agreement for the December 2023 Secondary Offering (defined below), we repurchased approximately 2.0 million shares of our Class A common stock from the underwriters at a price of $ 6.24 per share (the same price per share paid by the underwriters to Hoya Topco) on December 12, 2023.

On February 29, 2024, our Board authorized a share repurchase program for up to $ 100.0 million of our Class A common stock (the “2024 Share Repurchase Program”).

The 2024 Share Repurchase Program was publicly announced on March 5, 2024 and does not have a fixed expiration date.

As of December 31, 2024, we repurchased approximately 4.1 million shares of our Class A common stock for approximately $ 22.8 million under the 2024 Share Repurchase Program, for which we recorded approximately $ 0.1 million in commissions and excise taxes.

As of December 31, 2024, approximately $ 77.2 million remained available for future repurchases under the 2024 Share Repurchase Program.

All of the above share repurchases were accounted for as equity transactions and are recorded in Treasury stock in the Consolidated Balance Sheets.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

June 2023 Secondary Offering

We completed a public offering of 18.4 million shares of Class A common stock, comprising 16.0 million shares sold on May 22, 2023 and 2.4 million shares sold on June 15, 2023 pursuant to the full exercise of the underwriters' option to purchase additional shares (the "June 2023 Secondary Offering").

The shares were purchased by the underwriters from Hoya Topco, the selling stockholder, at a price of $ 7.68 per share and were sold at a public offering price of $ 8.00 per share.

Hoya Topco exchanged 18.4 million shares of Class B common stock and 18.4 million Intermediate Units for the shares of Class A common stock that it sold in the June 2023 Secondary Offering.

We did no t receive any proceeds from the sale of the shares by Hoya Topco in the June 2023 Secondary Offering.

In connection with the June 2023 Secondary Offering, we incurred $ 1.5 million of expenses during the year ended December 31, 2023, which are included within General and administrative expenses in the Consolidated Statements of Operations .

December 2023 Secondary Offering and Share Repurchase

On December 12, 2023, we completed a public offering of 23.575 million shares of Class A common stock, which included 3.1 million shares sold pursuant to the full exercise of the underwriters’ option to purchase additional shares (the "December 2023 Secondary Offering" and, together with the June 2023 Secondary Offering, the “2023 Secondary Offerings”) and 2.0 million shares subject to the Share Repurchase (as defined below) .

The shares were purchased by the underwriters from Hoya Topco, the selling stockholder, at a price of $ 6.24 per share and, other than the shares subject to the Share Repurchase, were sold at a public offering price of $ 6.50 per share.

Hoya Topco exchanged 23.575 million shares of Class B common stock and 23.575 million Intermediate Units for the shares of Class A common stock that it sold in the December 2023 Secondary Offering.

We did no t receive any proceeds from the sale of the shares by Hoya Topco in the December 2023 Secondary Offering.

In connection with the December 2023 Secondary Offering, we incurred $ 0.7 million of expenses during the year ended December 31, 2023, which are included within General and administrative expenses in the Consolidated Statements of Operations.

Pursuant to the underwriting agreement for the December 2023 Secondary Offering, we repurchased 2.0 million shares of Class A common stock from the underwriters at a price of $ 6.24 per share (the same price per share paid by the underwriters to Hoya Topco) (the “Share Repurchase”).

We funded the Share Repurchase with cash on hand.

The shares repurchased pursuant to the Share Repurchase are accounted for as Treasury stock in the Consolidated Balance Sheets.

2023 Secondary Offerings

In 2023, Hoya Topco, as selling stockholder, completed the following public offerings of shares of our Class A common stock:

• On May 22, 2023, it sold 16.0 million shares, and on June 15, 2023, it sold 2.4 million shares pursuant to the full exercise of the underwriters ’ option to purchase additional shares (collectively, the “June 2023 Secondary Offering” ).

The shares were purchased by the underwriters for $ 7.68 per share and sold at a public offering price of $ 8.00 per share.

Hoya Topco exchanged 18.4 million shares of our Class B common stock and 18.4 million Intermediate Units for the shares that it sold.

We did no t receive any proceeds from Hoya Topco ’s sale of shares in the June 2023 Secondary Offering.

• On December 12, 2023, it sold 23.6 million shares, which included 3.1 million shares sold pursuant to the full exercise of the underwriters ’ option to purchase additional shares and 2.0 million shares repurchased by us (collectively, the “December 2023 Secondary Offering” and, together with the June 2023 Secondary Offering, the “2023 Secondary Offerings”).

The shares were purchased by the underwriters for $ 6.24 per share and, other than the 2.0 million shares that we repurchased, sold at a public offering price of $ 6.50 per share.

Hoya Topco exchanged 23.6 million shares of our Class B common stock and 23.6 million Intermediate Units for the shares that it sold.

We did no t receive any proceeds from Hoya Topco’s sale of shares in the December 2023 Secondary Offering.

During the year ended December 31, 2023 , we recognized expenses of $ 1.5 million and $ 0.7 million for fees incurred in relation to the June 2023 Secondary Offering and the December 2023 Secondary Offering, respectively, both of which are recorded in General and administrative expenses in the Consolidated Statements of Operations.

Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in each component of AOCL attributable to Class A Common Stockholders (in thousands):

The following table presents the changes in each component of accumulated other comprehensive income (loss) attributable to Class A common stockholders during the years ended December 31, 2024 and 2023 (in thousands):

Unrealized Gain on Note

Foreign Currency Translation Adjustment

Accumulated Other Comprehensive Income (Loss)

Balance at January 1, 2023

Other comprehensive income

Recognized in other comprehensive income

Balance at December 31, 2023

Recognized in other comprehensive loss

Balance at December 31, 2024

Commitments and Contingencies

Purchase Obligations

We enter into non-cancelable arrangements, primarily related to the purchase of marketing services and tickets at an agreed upon pr ice.

We enter into non-cancelable arrangements, primarily related to the purchase of marketing services and tickets at an agreed upon price.

Our purchase obligations are $ 10.1 million payable in the next 12 months and $ 10.5 million payable thereafter.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

From time to time, we are involved in various claims and legal actions arising in the ordinary course of business, none of which, in the opinion of management, could have a material effect on our business, financial position or results of operations other than those matters discussed herein.

From time to time, we are involved in various claims and legal actions arising in the ordinary course of business, none of which, in management’s opinion, could have a material effect on our business, financial position, or results of operations other than those matters discussed below.

We are a co-defendant in a class action lawsuit in Canada alleging a failure to disclose service fees prior to checkout.

A final order approving the settlement of this lawsuit was entered by the court in August 2020.

In January 2022, we issued coupons to certain members of the class.

Other members of the class were notified in 2022 that they are eligible to submit a claim for a coupon, which they will receive in 2023.

As of December 31, 2023 and 2022, a liability of $ 0.9 million was recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets related to expected claim submissions and credit redemptions as of the measurement date.

We received multiple class action lawsuits related to customer compensation for cancellations, primarily as a result of COVID-19 restrictions.

A final order approving the settlement of one of the lawsuits was entered by the court in November 2021 .

As such, after insurance, $ 4.5 million was funded to a claims settlement pool in 2021 and fully disbursed in 2022.

A settlement was reached in another of the lawsuits in July 2022 and received final approval from the court on January 31, 2023.

After insurance, we paid $ 3.3 million to cover legal and administrative fees and approved claims.

Payments for approved claims were made in August 2023.

We had an accrued liability of zero and $ 1.6 million as of December 31, 2023 and 2022, respectively, within Accrued expenses and other current liabilities in the Consolidated Balance Sheets related to these matters.

In January 2022, we issued coupons to certain class members.

Other class members were notified in 2022 that they are eligible to submit a claim for a coupon.

As of December 31, 2024 and 2023, a liability of $ 0.9 million was recorded in Accrued expenses

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

and other current liabilities in the Consolidated Balance Sheets related to expected claim submissions and credit redemptions as of the measurement date.

We have been a defendant in multiple class action lawsuits related to customer compensation for cancellations, primarily as a result of COVID-19 restrictions.

A final order approving the settlement of one such lawsuit was entered by the court in November 2021 , pursuant to which we paid $ 4.5 million (after insurance) to fund a claims settlement pool in 2021 that was fully disbursed in 2022.

A final order approving the settlement of another such lawsuit was entered by the court on January 31, 2023, pursuant to which we paid $ 3.3 million (after insurance) to cover legal and administrative fees and approved claims, payments for which were made in August 2023.

We had no accrued liability as of December 31, 2024 and 2023 related to these matters.

We are a defendant in a lawsuit related to an alleged violation of the Illinois Biometric Information Privacy Act.

We deny these allegations and intend to vigorously defend against this lawsuit.

Based on the information currently available, we are unable to reasonably estimate a possible loss or range of possible losses and no litigation reserve has been recorded in the Consolidated Balance Sheets related to this matter.

An order preliminarily approving the settlement of this lawsuit was entered by the court on September 27, 2024, which remains subject to final court approval and which will be covered in full by insurance.

As of December 31, 2024, a liability of $ 0.3 m illion was recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets related to this matter.

We had no accrued liability as of December 31, 2023 related to this matter.

Indirect Taxes

In 2018, the U.S.

Supreme Court issued its decision in South Dakota v.

Wayfair Inc., which overturned previous case law that had precluded state and local governments from imposing sales tax collection requirements on retailers without a physical presence.

, which overturned previous case law that had precluded state and local governments from imposing sales tax collection requirements on retailers without a physical presence.

In response, most jurisdictions have adopted laws that attempt to impose tax collection obligations on out-of-state companies, and we have registered and begun collecting tax where required by statute.

It is reasonably possible that state or local governments will continue to adopt or interpret laws such that we are required to calculate, collect, and remit taxes on sales in their jurisdictions.

It is reasonably possible that state or local governments will continue to adopt or interpret laws such that we will be required to calculate, collect, and remit taxes on sales in their jurisdictions.

A successful assertion by one or more jurisdictions could result in material tax liabilities, including uncollected taxes on past sales, as well as penalties and interest.

Based on our analysis of certain state and local regulations, specifically related to marketplace facilitators and ticket sales, we have recorded liabilities in all jurisdictions where we believe a risk of loss is probable.

We continuously monitor state regulations and will implement required collection and remittance procedures if and when we are subject to such regulations.

As of December 31, 2023, we have recorded a liability of $ 3.2 million related to uncollected local admissions taxes.

This liability is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The related non-income tax expense was $ 3.2 million for the year ended December 31, 2023 .

Based on our analysis of certain state and local regulations, specifically related to marketplace facilitators and event ticket sales, we have recorded liabilities in all jurisdictions where we believe a risk of loss is probable and reasonably estimable.

We will continuously monitor state and local regulations and will implement required collection and remittance procedures if and when we are subject thereto.

To the extent we have sales for international events, we may be required to register with various foreign jurisdictions and to collect and remit indirect taxes.

It is reasonably possible that foreign jurisdictions may continue to adopt or interpret laws that impact the amount we are required to collect and remit.

A successful assertion by one or more such jurisdictions could result in material tax liabilities, including uncollected taxes on past sales, as well as penalties and interest.

Based on our analysis of certain foreign indirect tax regulations, specifically related to marketplace facilitators and event ticket sales, we have recorded liabilities in the jurisdictions where we believe a risk of loss is probable and reasonably estimable.

We will continuously monitor foreign regulations and will implement required collection and remittance procedures if and when we are subject thereto.

As of December 31, 2024 and 2023, a liability of $ 7.5 million and $ 3.2 million, respectively, was recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets related to uncollected indirect taxes (including sales taxes).

This liability is inclusive of both U.S.

and foreign jurisdictions where we believe it is probable we should remit but have not collected all required amounts from customers and is reduced by abatements received.

The net expense related to uncollected indirect taxes (including sales taxes) during the years ended December 31, 2024, 2023, and 2022 was $ 5.8 million, $ 3.2 million, and $ 2.8 million, respectively, which is recorded in General and administrative expenses in the Consolidated Statements of Operations.

Sponsorship Loan

On August 23, 2024, we and a privately held company entered into a sponsorship and custom content partnership agreement that provides us with various marketing services in exchange for our issuance of an interest-free loan payable in installments that could total a maximum of $ 5.0 million (the “Sponsorship Loan”).

We account for the Sponsorship Loan as a note receivable in accordance with ASC Topic 310, Receivables .

As of December 31, 2024, we have disbursed $ 2.0 million of the Sponsorship Loan (the “2024 Sponsorship Loan”).

If certain conditions are met,

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

we will issue an additional interest-free $ 1.5 million loan in each of September 2025 and September 2026.

While there is no stated maturity date for the 2024 Sponsorship Loan, we are entitled to a portion of advertising revenue received by the counterparty until the 2024 Sponsorship Loan is repaid in full.

The 2024 Sponsorship Loan had a carrying value of $ 1.8 million as of December 31, 2024, which is recorded in Other assets in the Consolidated Balance Sheets.

Additionally, we recognized less than $ 0.1 million of imputed interest income for the 2024 Sponsorship Loan during the year ended December 31, 2024, which is recorded in Interest expense – net in the Consolidated Statements of Operations.

Related –Party Transactions

Viral Nation Inc.

(“Viral Nation”) is a marketing agency that creates viral and social media influencer campaigns and provides advertising, marketing, and technology services.

Todd Boehly, a member of the Board, serves on the board of directors of Viral Nation and is the Co-Founder, Chairman and CEO of Eldridge Industries, LLC (“Eldridge”), which owns approximately 19% of Viral Nation.

We incurred an expense of $ 1.7 million, $ 0.8 million and $ 0.2 million for the years ended December 31, 2023, 2022 and 2021, respectively, which is presented in Marketing and selling expenses in the Consolidated Statements of Operations.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Todd Boehly, a member of our Board, serves on the board of directors of Viral Nation, and is the Co-Founder, Chairman, and CEO of Eldridge Industries, LLC (“Eldridge”), which owns greater than 10% of Viral Nation.

For Viral Nation’s services, we recognized an expense of $ 0.3 million, $ 1.7 million, and $ 0.8 million during the years ended December 31, 2024, 2023, and 2022, respectively, which is recorded in Marketing and selling expenses in the Consolidated Statements of Operations.

Rolling Stone

Rolling Stone, LLC (“Rolling Stone”) is a high-profile magazine and media platform that focuses on music, film, television, and news coverage.

Todd Boehly, a member of the Board, is the Co-Founder, Chairman and CEO of Eldridge, which owns in excess of 20% of Rolling Stone.

We incurred an expense of $ 0.7 million, $ 0.9 million and $ 0.1 million as part of our multifaceted partnership with Rolling Stone for the years ended December 31, 2023, 2022 and 2021, respectively, which is presented in Marketing and selling expenses in the Consolidated Statements of Operations.

Todd Boehly, a member of our Board, is the Co-Founder, Chairman, and CEO of Eldridge, which owns greater than 10% of Rolling Stone.

In relation to a strategic partnership with Rolling Stone, we recognized an expense of $ 0.7 million and $ 0.9 million during the years ended December 31, 2023 and 2022 , respectively, which is recorded in Marketing and selling expenses in the Consolidated Statements of Operations.

We did no t recognize an expense in relation to this strategic partnership during the year ended December 31, 2024.

Los Angeles Dodgers

The Los Angeles Dodgers (the “Dodgers”) is a Major League Baseball team based in Los Angeles, California.

Todd Boehly, a member of the Board, is a minority owner of the Dodgers.

As part of our strategic partnership with the Dodgers, including our designation as the Official Ticket Marketplace of the Dodgers and certain other advertising, marketing, promotional and sponsorship benefits, we incurred an expense of $ 1.5 million for the year ended December 31, 2023, which is presented in Marketing and selling expenses on the Consolidated Statements of Operations.

The Los Angeles Dodgers are an MLB team based in Los Angeles, California.

Todd Boehly, a member of our Board, owns greater than 10% of the Los Angeles Dodgers.

In relation to a strategic partnership with the Los Angeles Dodgers, including our designation as the official ticket marketplace of the Los Angeles Dodgers and certain other advertising, marketing, promotional, and sponsorship benefits, we recognized an expense of $ 2.2 million and $ 1.5 million during the years ended December 31, 2024 and 2023 , respectively, which is recorded in Marketing and selling expenses in the Consolidated Statements of Operations.

We did no t recognize an expense in relation to the strategic partnership with the Los Angeles Dodgers during the year ended December 31, 2022.

Tax Receivable Agreement

In connection with the Merger Transaction, we entered into the TRA with the existing Hoya Intermediate shareholders that provides for our payment to such shareholders of 85 % of the amount of the tax savings, if any, that we realize (or, under certain circumstances, are deemed to realize) as a result of, or attributable to, (i) increases in the tax basis of assets owned directly or indirectly by Hoya Intermediate or its subsidiaries from, among other things, any redemptions or exchanges of Intermediate Units, (ii) existing tax basis (including depreciation and amortization deductions arising from such tax basis) in long-lived assets owned directly or indirectly by Hoya Intermediate and its subsidiaries, and (iii) certain other tax benefits (including deductions in respect of imputed interest) related to us making payments under the TRA.

In connection with the 2023 Secondary Offerings, Hoya Topco exchanged Intermediate Units, and as a result, we recorded a liability of $ 165.2 million, a deferred tax asset of $ 75.2 million related to the 2023 Secondary Offerings as well as the projected payments under the TRA, a decrease to additional paid-in capital of $ 95.8 million, and a $ 5.8 million income tax benefit related to valuation allowance releases on the portion of the deferred tax asset associated with the basis difference in the investment in the partnership excluded from the disclosure of deferred tax asset and valuation allowance.

We also recognized an income tax benefit of $ 14.0 million related to the release of valuation allowances at the time of the 2023 Secondary Offerings.

Due to an increase in the applicable state and local tax rate, there was a remeasurement of the TRA liability recorded for the 2023 June Secondary Offering, which resulted in an increase in the liability of $ 0.6 million, with the corresponding expense included in other income in the Consolidated Statements of Operations for the year ended December 31, 2023.

As a result of the increase in the TRA liability, we recorded an increase in deferred tax assets of $ 0.3 million which was recorded to deferred tax expense.

The TRA-related liabilities are classified as current or long-term based on the expected date of payment.

At December 31, 2023, the amount due within the next 12 months was $ 0.1 million and is included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

In connection with the Merger Transaction, we entered into the TRA with the existing Hoya Intermediate unitholders.

For more information, see “Tax Receivable Agreement” in Note 20, Income Taxes .

Share Repurchase

1 unchanged sentence

On December 12, 2023, we repurchased 2.0 million shares of Class A common stock from the underwriters of the December 2023 Secondary Offering.

The shares were initially purchased by the underwriters from Hoya Topco, the selling stockholder in the

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

December 2023 Secondary Offering, at a price of $ 6.24 per share.

The shares were initially purchased by the underwriters from Hoya Topco, the selling stockholder, at a price of $ 6.24 per share.

We paid the same price per share to the underwriters, which was funded with cash on hand.

See Note 17, Equity, for more information regarding the December 2023 Secondary Offering and the Share Repurchase.

For more information, see Note 17, Equity .

VSI is subject to U.S.

federal and state income taxes with respect to our allocable share of any taxable income or loss of Hoya Intermediate, as well as any stand-alone income or loss we generate.

federal and state income taxes with respect to our allocable share of any taxable income of Hoya Intermediate, as well as any stand-alone income we generate.

Hoya Intermediate is organized as a limited liability company and treated as a partnership for federal and state income tax purposes.

Generally, entities characterized as a partnership for federal and state income tax purposes are not subject to entity-level income taxes.

Hoya Intermediate’s taxable income or loss is passed through to its members, including VSI and Hoya Topco, each of whom are responsible for their own U.S.

Hoya Intermediate’s taxable income or loss is passed through to its members, including VSI and Hoya Topco, each

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

of whom are responsible for their own U.S.

federal and state income taxes.

Other subsidiaries of VSI are treated as corporations and will separately file and pay taxes apart from VSI in various jurisdictions, including the United States (federal, state, and local), Canada, and Japan.

We anticipate this structure to remain in existence for the foreseeable future.

Components of income (loss) from operations before income taxes for the years ended December 31 2023, 2022 and 2021 were as follows (in thousands):

Components of income before income taxes for the years ended December 31, 2024, 2023, and 2022 were as follows (in thousands):

Years Ended December 31,

United States

Total income (loss) before income taxes

Income before income taxes

During the years ended December 31, 2024, 2023, and 2022, significant components of income tax expense (benefit) were as follows (in thousands):

State & Local

Total current income tax expense (benefit)

State & Local

Total deferred income tax expense (benefit)

Total income tax expense (benefit)

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Years Ended December 31,

State and local income tax expense

federal income tax expense

Foreign federal income tax expense

Current income tax expense

State and local income tax expense (benefit)

federal income tax expense (benefit)

Foreign federal income tax benefit

Deferred income tax expense (benefit)

Income tax expense (benefit)

A reconciliation of income taxes computed at the U.S.

federal statutory income tax rate of 21 % for the years ended December 31, 2023, 2022 and 2021 to our income tax (expense) benefit was as follows:

statutory tax rate

federal statutory income tax rate of 21 % to the rate of our income tax expense (benefit) for the years ended December 31, 2024, 2023, and 2022 was as follows:

Years Ended December 31,

federal statutory income tax rate

State income taxes

Foreign rate differential

Pass-through loss / (income)

Noncontrolling interests

Redeemable noncontrolling interests

Change in valuation allowance

Deferred tax partnership adjustment

Warrants remeasurement

Research & Development Credit

Impact of restructuring

Research and development credit

Limitation on compensation deductions

Total income tax expense (benefit)

Equity-based compensation shortfall

Tax rate change

Impact of restructuring

Income tax expense (benefit)

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

As of December 31, 2024 and 2023, our deferred tax balances consisted of the following (in thousands):

Deferred Tax Assets

Deferred tax assets – net

Net operating loss

Interest carryforwards

Investment in partnerships

Investment in partnership

Tax Receivable Agreement

Stock-based compensation

Total deferred tax assets

Equity-based compensation

Deferred tax assets

valuation allowance

Total deferred tax assets net of valuation allowance

Total deferred tax assets – net

Deferred tax liabilities

Intangible assets

Total deferred tax liabilities

Net Deferred Tax Assets / (Liabilities)

Net deferred tax asset / (liabilities)

As of December 31, 2024, our deferred tax assets were primarily the result of our investment in partnership, the TRA, net operating losses, interest limitations, and tax credit carryforwards.

We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized.

Valuation allowances have been established primarily with regard to the tax benefits of a portion of our investment in partnership and certain foreign tax attributes.

As of December 31, 2024, we have recorded a valuation allowance for the tax benefits of a portion of our investment in partnership deferred tax assets.

In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations.

After considering all those factors, we recorded a $ 26.2 million valuation allowance against our deferred tax assets, as we have determined these assets are not more likely than not to be realized as of December 31, 2024.

Excluded from the deferred tax asset for investment in partnerships above is a portion of the income tax basis in the partnership investment which will only reverse upon sale as a capital loss.

Excluded from the deferred tax asset for investment in partnership above is a portion of the income tax basis in the partnership investment that will only reverse upon sale as a capital loss.

As we do not expect to have sufficient sources of future capital gains to offset this future capital loss, we have not disclosed a deferred tax asset for this portion of the basis difference in the investment in the partnership, nor the associated valuation allowance.

However, reflected in Income tax expense (benefit) for the year ended December 31, 2023 is a valuation allowance release of $ 6.1 million related to the excluded portion of the deferred tax asset and valuation allowance on the basis difference in the investment in the partnership, which $ 5.8 million resulted from the 2023 Secondary Offerings and

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

$ 0.3 million resulted from the Share Repurchase.

We estimate that up to $ 10.7 million of future valuation allowance release associated with the excluded portion of the deferred tax asset and valuation allowance may result from future ownership changes.

1 unchanged sentence

however, the portion of deferred tax asset disclosed for which no ordinary tax benefit is expected due to partnership allocation rules is offset by a valuation allowance.

The deferred tax asset valuation allowance and changes were as follows (in thousands):

Balance at beginning of period

The following table summarizes the changes in the carrying amount of our deferred tax asset valuation allowance in 2024, 2023, and 2022 (in thousands):

Valuation allowance at beginning of year

Prior period adjustments (1)

(Credited) charged to costs and expenses

(Credited) charged to other accounts

Ending balance

Credited to costs and expenses

Charged (credited) to other accounts

Valuation allowance at end of year

(1) In 2022, this adjustment relates to a true-up of the investment in partnership deferred tax asset and related valuation allowance which has been updated to remove partnership tax basis that we expect will only reverse upon sale as a capital loss.

In 2023, there was an adjustment to the investment in partnership and net operating loss deferred tax assets and related valuation allowance.

These adjustments had no net impact to tax expense (benefit) in either period.

As of December 31, 2023, our deferred tax assets were primarily the result of our investment in partnership, Tax Receivable Agreement, net operating losses, interest limitations, and tax credit carryforwards.

In 2023, there was an adjustment to the investment in partnership and net operating

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

loss deferred tax assets and related valuation allowance.

These adjustments had no net impact to our income tax benefit in either period.

As of December 31, 2022, a full valuation allowance was maintained against our U.S.

1 unchanged sentence

As of each reporting date we consider new evidence, both positive and negative, that could affect our view of the future realization of deferred tax assets.

As of June 30, 2023, in part because in the current year we entered into a cumulative income position in the U.S.

During the year ended December 31, 2023 , in part because in the current year we entered into a cumulative income position in the U.S.

federal tax jurisdiction, we determined that there is sufficient positive evidence to conclude that it is more likely than not that deferred tax assets of $ 31.3 million associated with our investment in partnership, U.S.

1 unchanged sentence

We therefore reduced the valuation allowance accordingly.

As of December 31, 2024, after reassessing the realizability of our deferred tax assets, we reduced the valuation allowance by $ 6.1 million.

As of December 31, 2022 , we determined that there was sufficient positive evidence to conclude that it is more likely than not that our Canadian deferred taxes of $ 1.9 million are realizable.

5 unchanged sentences

federal and state operating loss carryforwards begin to expire in 2029 with the remainder of the federal and state net operating loss carryforwards having no expiration date.

Certain tax attributes remain subject to an annual limitation under Internal Revenue Code section 382 as a result of the historical acquisitions.

At December 31, 2023, with respect to our operations outside the United States, we had foreign operating loss carryforwards totaling $ 8.1 million, which begin to ex pire in 2037 .

Certain tax attributes remain subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986 as a result of the historical acquisitions.

At December 31, 2024, with respect to our operations outside the United States, we had foreign operating loss carryforwards totaling $ 3.7 million, which begin to expire in 2037 .

At December 31, 2024, we were not indefinitely reinvested on undistributed earnings from our foreign operations and the deferred tax liability associated with the future repatriation of these earnings is immaterial.

ASC 740, Income Taxes , prescribes a recognition threshold of more-likely-than not to be sustained upon examination as it relates to the accounting for uncertainty in income tax benefits recognized in an enterprise’s financial statements.

Our unrecognized tax benefits which relate to a tax refund are as follows:

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Balance at beginning of the year

ASC Topic 740, Income Taxes , prescribes a recognition threshold of more-likely-than not to be sustained upon examination as it relates to the accounting for uncertainty in income tax benefits recognized in an enterprise’s financial statements.

The following table summarizes the changes in the carrying amount of our unrecognized benefits related to a tax refund in 2024, 2023, and 2022 (in thousands):

Unrecognized tax benefits at beginning of year

Tax positions taken in the prior year

Balance at end of the year

We classified interest and penalties associated with income taxes in income tax expense (benefit) within the Consolidated Statements of Operations.

A liability of $ 0.5 million has been recognized related to interest and penalties as of December 31, 2023, all of which was accrued in 2023.

Unrecognized tax benefits at end of year

Interest and penalties associated with income taxes are recorded in Income tax expense (benefit) in the Consolidated Statements of Operations.

A liability of $ 1.4 million has been recognized related to interest and penalties as of December 31, 2024, $0.8 million of which was accrued during the year ended December 31, 2024 2024.

The total amount of gross unrecognized tax benefits that, if recognized, would impact the effective tax rate is $ 7.5 million as of December 31, 2024.

Due to the expiration of the applicable statute of limitations, it is reasonably possible that our gross unrecognized tax benefits may decrease by $ 7.5 million within the next 12 months.

We are subject to routine audits by taxing jurisdictions.

2 unchanged sentences

Tax Receivable Agreement

In connection with the Merger Transaction, we entered into the TRA with the existing Hoya Intermediate shareholders that will provide for payment to Hoya Intermediate shareholders of 85 % of the amount of the tax savings, if any, that we realize (or, under certain circumstances, are deemed to realize) as a result of, or attributable to, (i) increases in the tax basis of assets owned directly or indirectly by Hoya Intermediate or its subsidiaries from, among other things, any redemptions or exchanges of Intermediate Units (ii) existing tax basis (including depreciation and amortization deductions arising from such tax basis) in long-lived assets owned directly or indirectly by Hoya Intermediate and its subsidiaries, and (iii) certain other tax benefits (including deductions in respect of imputed interest) related to VSI making payments under the TRA.

In connection with the Merger Transaction, we entered into the TRA with the existing Hoya Intermediate unitholders that provides for our payment to such unitholders of 85 % of the amount of any tax savings that we realize (or, under certain circumstances, are deemed to realize) as a result of, or attributable to, (i) increases in the tax basis of assets owned directly or indirectly by Hoya Intermediate or its subsidiaries from, among other things, any redemptions or exchanges of Intermediate Units, (ii) existing tax basis (including depreciation and amortization deductions arising

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

from such tax basis) in long-lived assets owned directly or indirectly by Hoya Intermediate and its subsidiaries, and (iii) certain other tax benefits (including deductions in respect of imputed interest) related to us making payments under the TRA.

In connection with the 2023 Secondary Offerings, Hoya Topco exchanged Intermediate Units and, as a result, we recorded a liability of $ 165.2 million, a deferred tax asset of $ 75.2 million related to the 2023 Secondary Offerings and projected payments under the TRA, a decrease to additional paid-in capital of $ 95.8 million, and a $ 5.8 million income tax benefit related to valuation allowance releases on the portion of the deferred tax asset associated with the basis difference in the investment in the partnership excluded from the disclosure of deferred tax asset and valuation allowance.

We also recognized an income tax benefit of $ 14.0 million related to the release of valuation allowances at the time of the 2023 Secondary Offerings.

As a result of the increase in the TRA liability, we recorded an increase in deferred tax assets of $ 0.3 million .

In 2024, the TRA liability was remeasured and reduced by $ 6.0 million.

The decrease was primarily due to changes in the state tax rate and our existing tax basis allocations.

In connection with the remeasurement of the TRA liability, during the year ended December 31, 2024, we recorded a decrease in Deferred tax assets – net of $ 2.8 million and recognized $ 6.0 million of income, which is recorded in Other income – net in the Consolidated Statements of Operations.

TRA-related liabilities are classified as current or long-term based on the expected date of payment.

As of December 31, 2023, $ 0.1 million is due within 12 months and included as a current liability.

The remaining liability is included in TRA liability within long-term liabilities in the Consolidated Balance Sheets.

As of December 31, 2024, $ 4.0 million is due within 12 months and is recorded as a current liability in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The remaining amount is long-term and is recorded in TRA liability in the Consolidated Balance Sheets.

Amounts payable under the TRA are contingent upon the generation of future taxable income over the term of the TRA and future changes in tax laws.

3 unchanged sentences

Equity-Based Compensation

The 2021 Incentive Award Plan, which was approved and adopted to facilitate the grant of equity incentive awards to our employees, directors and consultants, became effective on October 18, 2021 upon closing of the Merger Transaction.

Our 2021 Incentive Award Plan (as amended, the “2021 Plan”) was approved and adopted in order to facilitate the grant of equity incentive awards to our employees, non-employee directors, and consultants.

The 2021 Plan became effective in October 2021 upon consummation of the Merger Transaction, and the First Amendment to the 2021 Plan became effective on February 5, 2024.

RSUs are denominated in a hypothetical equivalent number of shares of our Class A common stock.

The value of each RSU is equal to the fair value of our Class A common stock on the grant date.

Each RSU is settled in a share of our Class A common stock after vesting.

During the years ended December 31, 2024, 2023, and 2022 , we granted to certain employees 11.1 million, 2.6 million, and 1.7 million RSUs, respectively, at a weighted average grant date fair value of $ 5.30 per share, $ 7.18 per share, and $ 10.01 per share, respectively.

RSUs granted to employees vest over three years, with one-third vesting on the first anniversary of the grant date and the remaining portion vesting on a quarterly basis thereafter, subject to the employee’s continued employment through the applicable vesting date.

During the years ended December 31, 2024, 2023, and 2022 , we granted to our directors 0.3 million, 0.1 million, and 0.1 million RSUs, respectively, at a weighted average grant date fair value of $ 5.24 per share, $ 7.68 per share, and $ 8.85 per share, respectively.

RSUs granted to directors fully vest on the earlier of (i) one day prior to the date of our first annual meeting of stockholders following the grant date and (ii) the first anniversary of the grant date, subject to the director ’s continued service on our Board through the applicable vesting date.

During each of the years ended December 31, 2024, 2023, and 2022 , we granted to certain consultants less than 0.1 million RSUs at a weighted average grant date fair value of $ 3.70 per share, $ 7.98 per share, and $ 8.94 per share,

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

We award RSUs to our employees, directors and certain consultants.

RSUs generally vest over periods from one to four years from issuance.

We account for forfeitures of outstanding, but unvested grants in the period they occur.

A summary of activity for RSUs is as follows (in thousands, except per share data):

Weighted-Average

Grant Date Fair Value

respectively.

RSUs granted to consultants either fully vest on the first anniversary of the grant date or in equal annual installments over three years, subject to the consultant’s continued service through the applicable vesting date.

A summary of the total activity for RSUs during the years ended December 31, 2024 and 2023 is as follows (in thousands, except per RSU data):

Weighted Average Grant Date Fair Value Per RSU

Unvested at December 31, 2022

2 unchanged sentences

Stock Options

Our stock options provide for the purchase of shares of Class A common stock in the future at an exercise price set on the grant (or modification) date.

Our stock option awards vest over three years, with one-third vesting on the one-year anniversary of the grant date and the remaining options vesting on a quarterly basis thereafter, with the exception of the October 2021 Options (as defined below), which vest in equal quarterly installments over four years.

Our stock options provide for the purchase of shares of our Class A common stock in the future at an exercise price set on the grant (or modification) date.

Our stock option awards vest over three years, with one-third vesting on the one-year anniversary of the grant date and the remaining options vesting on a quarterly basis thereafter.

Stock options granted to employees have a contractual term of ten years from the grant date, subject to the employee’s continued service through the applicable vesting date.

Stock options granted to consultants have a contractual term of seven years from the grant date, subject to the consultant’s continued service through the applicable vesting date.

October 2021 Options .

On October 19, 2021, we granted to certain employees 3.1 million stock options at an exercise price of $ 13.09 per share and 1.0 million stock options at an exercise price of $ 15.00 per share (collectively, the "October 2021 Options").

The fair value of the October 2021 Options was estimated on the grant date using the Hull-White model.

The Board declared a special dividend of $ 0.23 per share to holders of Class A common stock on October 18, 2021, which we paid on November 2, 2021 .

On November 2, 2021, the exercise price of the outstanding October 2021 Options with an exercise price of $ 13.09 per share was modified and reduced by the same $ 0.23 per share to $ 12.86 per share.

The amount recognized in the compensation expense relating to stock option modification for the year ended December 31, 2021 is immaterial.

March 2022 Options .

On March 11, 2022, we granted to certain employees 2.6 million stock options at an exercise price of $ 10.26 per share and a grant date fair value of $ 3.99 per option (the "March 2022 Options").

The fair value of the March 2022 Options was estimated on the grant date using the Black-Scholes model.

November 2022 Options.

On November 11, 2022, we granted to certain employees 0.1 million stock options at an exercise price of $ 8.22 per share and a grant date fair value of $ 3.66 (the "November 2022 Options").

The fair value of the November 2022 Options was estimated on the grant date using the Black-Scholes model.

March 2023 Options .

In March 2023, we granted to certain employees 3.6 million stock options at an exercise price of $ 7.17 per share and a grant date fair value of $ 3.30 per option.

The fair value of these stock options was estimated on the grant date using the Black-Scholes model.

June 2023 Options.

In June 2023, we granted to certain consultants 0.9 million stock options, divided into three tranches of 0.2 million, 0.3 million and 0.4 million options at exercise prices of $ 7.98 , $ 17.00 and $ 23.00 per share, respectively, and grant date fair values of $ 3.22 , $ 1.87 and $ 1.44 per option, respectively.

The fair value of these stock options was estimated on the grant date using the Hull-White model.

2021 Stock Options

The fair value of the 2021 Stock Options was estimated on the grant date using the Hull-White model.

Our Board declared a special dividend of $ 0.23 per share to holders of Class A common stock on October 18, 2021, which we paid on November 2, 2021.

On November 2, 2021, the exercise price of the outstanding 2021 Stock Options with an exercise price of $ 13.09 per share was modified and reduced by $ 0.23 per share to $ 12.86 per share (the “2021 Stock Option Modification”).

The amount recognized in compensation expense related to the 2021 Stock Option Modification during the year ended December 31, 2021 was immaterial.

2022 Stock Options

On March 11, 2022, we granted to certain employees 2.6 million stock options at an exercise price of $ 10.26 per share and a grant date fair value of $ 3.99 per option (the “March 2022 Stock Options”).

The fair value of the March 2022 Stock Options was estimated on the grant date using the Black-Scholes model.

On November 11, 2022, we granted to certain employees 0.1 million stock options at an exercise price of $ 8.22 per share and a grant date fair value of $ 3.66 (the “November 2022 Stock Options” and, together with the March 2022 Stock Options, the “2022 Stock Options”).

The fair value of the November 2022 Stock Options was estimated on the grant date using the Black-Scholes model.

2023 Stock Options

On March 10, 2023, we granted to certain employees 3.6 million stock options at an exercise price of $ 7.17 per share and a grant date fair value of $ 3.30 per option (the “March 2023 Stock Options”).

The fair value of the March 2023 Stock Options was estimated on the grant date using the Black-Scholes model.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

December 2023 Cancellation and Repricing.

On December 7, 2023 (the "Effective Date"), 894,840 of the October 2021 Options with an exercise price of $ 15.00 per share and 894,840 of the October 2021 Options with an exercise price of $ 12.86 per share were cancelled.

Also on the Effective Date, the exercise price of the remaining October 2021 Options, as well as all outstanding March 2022 Options and November 2022 Options, was reduced to $ 6.76 per share, the closing price of the Class A common stock on the Effective Date, provided that if any of such stock options are exercised prior to the one-year anniversary of the Effective Date, the holder will be required to pay the original exercise price (the “Cancellation and Repricing”).

The Cancellation and Repricing were treated as a modification of the affected stock options.

The incremental fair value of the modification, which was calculated based on the difference between the fair value of each affected stock option immediately before and after the Cancellation and Repricing using the Hull-White model, w as less than $ 0.1 million.

The cancelled October 2021 Options had a grant date fair value of $ 6.6 million, of which $ 3.0 million had not yet been recognized as of the Effective Date.

That amount will be recognized over the remaining requisite service period of the remaining October 2021 Options and March 2022 Options.

The following assumptions were used to calculate the fair value of our stock options:

On June 14, 2023, we granted to certain consultants 0.9 million stock options, divided into three tranches of 0.2 million, 0.3 million, and 0.4 million options, at exercise prices of $ 7.98 , $ 17.00 and $ 23.00 per share, respectively, and grant date fair values of $ 3.22 , $ 1.87 and $ 1.44 per option, respectively (the “June 2023 Stock Options” and, together with the March 2023 Stock Options, the “2023 Stock Options”).

The fair value of the June 2023 Stock Options was estimated on the grant date using the Hull-White model.

Stock Option Cancellation and Repricing

On December 7, 2023 (the “Effective Date”), (i) 894,840 of the 2021 Stock Options with an exercise price of $ 15.00 per share and 894,840 of the 2021 Stock Options with an exercise price of $ 12.86 per share were cancelled and (ii) the exercise price of the remaining 2021 Stock Options, as well as all outstanding 2022 Stock Options, was reduced to $ 6.76 per share, the closing price of the Class A common stock on the Effective Date, provided that if any of such stock options were exercised prior to the one-year anniversary of the Effective Date, the holder would be required to pay the original exercise price (the “Stock Option Cancellation and Repricing”).

The Stock Option Cancellation and Repricing was treated as a modification of the affected stock options.

The incremental fair value of the modification, which was calculated based on the difference between the fair value of each affected stock option immediately before and after the Stock Option Cancellation and Repricing using the Hull-White model, was less than $ 0.1 million.

The cancelled 2021 Stock Options had a grant date fair value of $ 6.6 million, of which $ 3.0 million had not yet been recognized as of the Effective Date and will instead be recognized over the remaining requisite service period of the remaining 2021 Stock Options and March 2022 Stock Options.

The following assumptions were used to calculate the fair value of the 2022 Stock Options, the 2023 Stock Options, and the Stock Option Cancellation and Repricing:

December 7, 2023

3 unchanged sentences

March 11, 2022

October 19, 2021

Estimated volatility

47.0 % - 48.0 %

Expected term (years)

Expected volatility

47.0 % - 48.0 %

Risk-free rate

Expected dividend yield

A summary of activity for stock options is as follows (in thousands, except price per option data):

Exercise Price

Life (in Years)

Intrinsic Value

No stock options were granted during the year ended December 31, 2024 .

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

A summary of the total activity for stock options during the years ended December 31, 2023 and 2024 is as follows (in thousands, except price per option data):

Stock Options

Weighted Average Exercise Price Per Stock Option

Weighted Average Remaining Contractual Life (Years)

Aggregate Intrinsic Value

Outstanding at December 31, 2022

Granted to employees

Granted to consultants:

Outstanding at December 31, 2023

1 unchanged sentence

Vested and exercisable at December 31, 2024

The weighted-average grant date fair value per stock options outstanding as of December 31, 2023, 2022 and 2021 was $ 2.88 , $ 3.82 and $ 3.71 , respectively.

The weighted-average grant date fair value for stock options forfeited was $ 3.83 during the year ended December 31, 2022.

The weighted-average grant-date fair value for stock options vested was $ 3.89 a nd $ 3.71 during the years ended December 31, 2023 and 2022, respectively.

The weighted-average grant date fair value for stock options outstanding during the years ended December 31, 2024, 2023, and 2022 was $ 3.44 , $ 2.88 , and $ 3.82 , respectively.

The weighted-average grant date fair value for stock options forfeited during the years ended December 31, 2024, 2023, and 2022 was $ 3.53 , zero , and $ 3.83 , respectively.

The weighted-average grant-date fair value for stock options vested during the years ended December 31, 2024, 2023, and 2022 was $ 3.58 , $ 3.89 , a nd $ 3.71 , respectively.

The weighted-average grant-date fair value for stock options cancelled was $ 3.68 during the year ended December 31, 2023.

Profits Interests and Phantom Units

Prior to the Merger Transaction, certain members of management received equity-based compensation awards for profits interest in Hoya Topco in the form of Incentive Units, phantom units, Class D Units, and Class E Units.

Hoya Topco Profits Interests and Phantom Units

Prior to the Merger Transaction, certain members of management received equity-based compensation awards for profits interests in Hoya Topco in the form of incentive units, phantom units, Class D Units, and Class E Units.

Each incentive unit vests ratably over five years and accelerates upon a change in control of Hoya Topco.

We do not expect

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

any future profits interest to be granted after the Merger Transaction.

We do not expect any future profits interests to be granted after the Merger Transaction.

The fair value of the incentive units granted is estimated using the Black-Scholes model.

7 unchanged sentences

The expected volatility is estimated on the date of grant based on the average historical stock price volatility of comparable publicly traded companies.

The following table summarizes the Hoya Topco Incentive Units, Class D Units, and Class E Units for the years ended December 31, 2023, 2022, and 2021:

Class B-1 Units

On June 10, 2024, the Board of Managers of Hoya Topco (the “Hoya Topco Board”) approved the redemption, repurchase and cancellation by Hoya Topco (using Hoya Topco’s funds) of all of its outstanding profits interests held by our current employees (including the Class B-1, Class D, and Class E Units discussed elsewhere in this Report).

Accordingly, we recognized equity-based compensation expense related to the profits interests of $ 4.6 million for the year ended December 31, 2024.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

On June 10, 2024, the Hoya Topco Board also approved the repurchase and cancellation by Hoya Topco (using Hoya Topco’ s funds) of all of its outstanding phantom units held by our employees.

The phantom units held service and performance conditions, requiring us to recognize a liability for the fair value of the outstanding phantom units only when we conclude it is probable that the performance conditions will be achieved.

Accordingly, we recognized equity-based compensation expense related to the phantom units of $ 5.0 million for the year ended December 31, 2024 .

There was no equity-based compensation expense previously recognized related to the phantom units.

Hoya Topco had no outstanding profits interests or phantom units held by our current employees, and we had no unrecognized equity-based compensation expense related thereto, as of December 31, 2024.

A summary of the total activity for the Hoya Topco incentive units, Class D Units, and Class E Units during the years ended December 31, 2024, 2023, and 2022 is as follows:

Incentive Units

Class D Units

Class E Units

Balances at January 1, 2021

Units granted

Units repurchased

Units forfeited

Balances at December 31, 2021

Units granted

Units repurchased

Units forfeited

Balances at December 31, 2022

Units granted

Units repurchased

Units forfeited

Balances at December 31, 2023

Weighted Average Grant Date Fair Value Per Unit

Outstanding at December 31, 2022

Outstanding at December 31, 2023

Outstanding at December 31, 2024

As of December 31, 2024 , the remaining outstanding Class D units are fully vested and held by former employees such that any future activity would not impact our financial results.

Compensation Expense

For the years ended December 31, 2024, 2023, and 2022 , equity-based compensation expense related to RSUs was $ 31.0 million, $ 14.3 million, and $ 8.4 million, respectively.

Unrecognized compensation expense relating to unvested RSUs as of December 31, 2023 was approximately $ 32.3 million, which is expected to be recognized over a weighted average period of approximately two years .

Unrecognized compensation expense relating to unvested RSUs as of December 31, 2024 was approximately $ 51.3 million, which is expected to be recognized over a weighted average period of approximately one year.

For the years ended December 31, 2024, 2023, and 2022, equity-based compensation expense related to stock options was $ 10.7 million, $ 10.2 million, and $ 6.2 million, respectively.

Unrecognized compensation expense relating to unvested stock options as of December 31, 2023 was approximately $ 22.6 million, which is expected to be recognized over a weighted average period of approximately two years .

For the years ended December 31, 2023, 2022 and 2021, equity-based compensation expense related to profit interests was $ 3.5 milli on, $ 4.5 million and $ 4.4 million, respectively.

Unrecognized compensation expense as of

Unrecognized compensation expense relating to unvested stock options as of December 31, 2024 was approximately $ 7.3 million, which is expected to be recognized over a weighted average period of approximately 0.5 years.

For the years ended December 31, 2024, 2023, and 2022 , equity-based compensation expense related to profits interests was $ 4.6 million, $ 3.5 million, and $ 4.5 million, respectively.

There was no unrecognized compensation expense relating to profits interests as of December 31, 2024.

For the years ended December 31, 2024, 2023, and 2022 , equity-based compensation expense excludes $ 0.8 million, $ 0.4 million, and $ 0.1 million related to capitalized development costs.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

December 31, 2023 related to these incentive units was $ 1.0 million , which is expected to be recognized over a weighted average period of approximately two years .

For the years ended December 31, 2023 and 2022, equity-based compensation expense excludes $ 0.4 million and $ 0.1 million related to capitalized development costs.

Earnings Per Share

We calculate basic and diluted net income (loss) per share of Class A common stock in accordance with ASC 260, Earnings per Share.

Class B common stock does not have economic rights in VSI and, as a result, is not considered a participating security for basic and diluted income (loss) per share.

As such, basic and diluted income (loss) per share of Class B common stock has not been presented.

However, holders of Class B common stock are allocated income in Hoya Intermediate (our operating entity) according to their weighted average percentage ownership of Intermediate Units during each quarter.

Net income (loss) attributable to redeemable noncontrolling interests is calculated by multiplying Hoya Intermediate's net income (loss) for each quarterly period by Hoya Topco's weighted average percentage ownership of Intermediate Units during the period.

See Note 16, Redeemable Noncontrolling Interest, for detail on Hoya Topco’s right to exchange its Intermediate Units.

The following table provides the net income (loss) attributable to Hoya Topco's redeemable noncontrolling interests for the years ended December 31, 2023 and 2022, and the period from October 18, 2021 to December 31, 2021:

Net income (loss)—Hoya Intermediate

Hoya Topco’s weighted average % allocation of Hoya Intermediate's net income (loss)

Net income (loss) attributable to Hoya Topco's redeemable noncontrolling interests

Net income (loss) attributable to Class A common stockholders–basic is calculated by subtracting the portion of Hoya Intermediate's net income (loss) attributable to redeemable noncontrolling interests from our total net income, which includes our net income for activities outside of our investment in Hoya Intermediate, including income tax expense for VSI's portion of income, as well as the full results of Hoya Intermediate on a consolidated basis.

Net income (loss) per Class A common stock–diluted is based on the average number of shares of Class A common stock used for the basic earnings per share calculation, adjusted for the weighted-average number of Class A common share equivalents outstanding for the period determined using the treasury stock and if-converted methods, as applicable.

Net income (loss) attributable to Class A common stockholders–diluted is adjusted for (i) our share of Hoya Intermediate’s consolidated net income (loss) after giving effect to Intermediate Units that convert into potential shares of Class A common stock, to the extent it is dilutive, and (ii) the impact of changes in the fair value of Hoya Intermediate Warrants, to the extent they are dilutive.

We calculate basic and diluted net income per share of Class A common stock in accordance with ASC Topic 260, Earnings per Share .

Because our Class B common stock does not have economic rights in VSI, it is not considered a participating security for basic and diluted net income per share, and we do not present basic and diluted net income per share of Class B common stock.

However, our Class B common stockholders are allocated income in Hoya Intermediate (our operating entity) according to their weighted average percentage ownership of Intermediate Units during each quarter.

Net income attributable to redeemable noncontrolling interests is calculated by multiplying Hoya Intermediate’s net income in each quarterly period by Hoya Topco’s weighted average percentage ownership of Intermediate Units during the period.

See Note 16, Redeemable Noncontrolling Interests, for more information regarding Hoya Topco’s right to exchange its Intermediate Units.

The following table provides the net income attributable to Hoya Topco’s redeemable noncontrolling interests for the years ended December 31, 2024, 2023, and 2022 (in thousands):

Years Ended December 31,

Net income—Hoya Intermediate

Hoya Topco’s weighted average % allocation of Hoya Intermediate's net income

Net income attributable to Hoya Topco's redeemable noncontrolling interests

Net income attributable to Class A common stockholders–basic is calculated by subtracting the portion of Hoya Intermediate’s net income attributable to redeemable noncontrolling interests from our total net income, which includes our net income for activities outside of our investment in Hoya Intermediate, including income tax expense (benefit) for VSI’s portion of income, as well as the full results of Hoya Intermediate on a consolidated basis.

Net income per Class A common stock–diluted is based on the average number of shares of our Class A common stock used for the basic earnings per share calculation, adjusted for the weighted average number of Class A common share equivalents outstanding for the period determined using the treasury stock and if-converted methods, as applicable.

Net income attributable to Class A common stockholders–diluted is adjusted for (i) our share of Hoya Intermediate’s consolidated net income after giving effect to Intermediate Units that convert into potential shares of our Class A common stock, to the extent it is dilutive, and (ii) the impact of changes in the fair value of the Intermediate Warrants, to the extent they are dilutive.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

The following tables set forth the computation of basic and diluted net income (loss) per share of Class A common stock for the years ended December 31, 2023 and 2022, and the period from October 18, 2021 to December 31, 2021 (in thousands, except share and per share data):

The following table sets forth the computation of basic and diluted net income per share of Class A common stock for the years ended December 31, 2023 and 2022 (in thousands, except share and per share data):

Years Ended December 31,

Numerator—basic

Net income (loss)

(Income) loss attributable to redeemable noncontrolling interests

Net income (loss) attributable to Class A Common Stockholders—basic

net income attributable to redeemable noncontrolling interests

Net income attributable to Class A common stockholders—basic

Denominator—basic

Weighted average Class A common stock outstanding—basic

Net income (loss) per Class A common stock—basic

Net income per Class A common stock—basic

Numerator—diluted

Net income (loss) attributable to Class A Common Stockholders—basic

Net income (loss) effect of dilutive securities:

Effect of dilutive Exercise Warrants

Effect of dilutive RSUs

Effect of dilutive noncontrolling interests

Effect of dilutive Hoya Intermediate Warrants

Net income (loss) attributable to Class A Common Stockholders—diluted

Net income attributable to Class A common stockholders—basic

Weighted average effect of dilutive securities:

Redeemable noncontrolling interests

Exercise Warrants

Net income attributable to Class A common stockholders—diluted

Denominator—diluted

1 unchanged sentence

Weighted average effect of dilutive securities:

Effect of dilutive Exercise Warrants

Effect of dilutive RSUs

Effect of dilutive noncontrolling interests

Redeemable noncontrolling interests

Exercise Warrants

Weighted average Class A common stock outstanding—diluted

Net income (loss) per Class A common stock—diluted

Potential shares of our Class A common stock are excluded from the computation of diluted net income (loss) per share of Class A common stock if their effect would have been anti-dilutive for the period presented or if the issuance of shares is contingent upon events that did not occur by the end of the period.

The dilution reflected in diluted net income per share of Class A common stock during the year ended December 31, 2023 relates primarily to an assumed conversion of our noncontrolling interests to shares of our Class A common stock, which would not have a commensurate effect on net income, primarily due to the release of the valuation allowance which benefit is attributable to VSI only.

The Vegas.com Acquisition and the subsequent pushdown of the acquired entity to Hoya Intermediate primarily results in incremental deferred tax expense.

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

The following table presents potentially dilutive securities excluded from the computation of diluted net income (loss) per share of Class A common stock for the periods presented that could potentially dilute earnings per share in the future:

Net income per Class A common stock—diluted

Potential shares of our Class A common stock are excluded from the computation of diluted net income per share of Class A common stock if their effect would have been anti-dilutive for the periods presented or if the issuance of shares is contingent upon events that did not occur by the end of the periods presented.

The dilution reflected in diluted net income per share of Class A common stock during the year ended December 31, 2023 relates primarily to an assumed conversion of redeemable noncontrolling interests to shares of our Class A common stock, which would not have had a commensurate effect on net income, primarily due to the release of the valuation allowance which benefit is attributable to VSI only.

The Vegas.com Acquisition and the subsequent pushdown of the acquired entity to Hoya Intermediate primarily resulted in the recognition of incremental deferred tax expense, which is recognized in Income tax expense (benefit) in the Consolidated Statements of Operations.

The following table presents potentially dilutive securities that are excluded from the computation of diluted net income per share of Class A common stock for the years ended December 31, 2024, 2023, and 2022 that could potentially dilute earnings per share in the future:

Years Ended December 31,

Stock options

1 unchanged sentence

Exercise Warrants

Hoya Intermediate Warrants

Shares of Class B common stock

We analyzed the calculation of income (loss) per share for periods prior to the Merger Transaction and determined that it resulted in values that would not be meaningful to the users of our consolidated financial statements.

Therefore, income (loss) per share information has not been presented for periods prior to the Merger Transaction.

Changes in Disagreements With Accountants on Accounting and Financial Disclos ure

Intermediate Warrants

VIVID SEATS INC.

NOTES to the Consolidated Financial Statements

Subsequent Events

On February 5, 2025, we amended the 2024 First Lien Loan to reprice all $ 393.0 million of the then-outstanding balance, reducing the applicable interest thereon to SOFR (subject to a 0.5 % floor) plus a margin of 2.25 %;

provided that such margin may be reduced to 2.00 % if the corporate rating assigned to us by Moody’s Investors Service, Inc.

and S&P Global Ratings is at least Ba3/BB- (in each case, stable or better).

The amendment did not materially change any of the other terms and conditions of the 2024 First Lien Loan;

accordingly, except as set forth in the preceding sentence, the repriced 2024 First Lien Loan has the same material terms (including with respect to maturity, prepayment, security, covenants and events of default) as described under “2024 First Lien Loan” in Note 13, Long-Term Debt – Net .

Changes in Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data