Vivid Seats Inc. 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm 55 Consolidated Balance Sheets 56 Consolidated Statements of Operations 57 Consolidated Statements of Comprehensive Income (Loss) 58 Consolidated Statements of Equity (Deficit) 60 Consolidated Statements of Cash Flows 61 Notes to the Consolidated Financial Statements 63 54 Report of Independent Registered Public Accounting Firm To the shareholders and the Board of Directors of Vivid Seats Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Vivid Seats Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 , in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Chicago, Illinois March 12, 2026 We have served as the Company’s auditor since 2021. 55 VIVID SEATS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 102,702 $ 243,482 Restricted cash 604 1,166 Accounts receivable – net 30,664 48,315 Inventory – net 18,166 19,601 Prepaid expenses and other current assets 26,336 32,607 Total current assets 178,472 345,171 Property and equipment – net 12,373 12,567 Right-of-use assets – net 10,515 12,008 Intangible assets – net 141,528 233,116 Goodwill – net 283,915 943,119 Deferred tax assets – net 1,123 77,967 Investments 5,365 6,929 Other assets 3,575 5,219 Total assets $ 636,866 $ 1,636,096 Liabilities, redeemable noncontrolling interests, and shareholders' equity (deficit) Current liabilities: Accounts payable $ 153,418 $ 232,984 Accrued expenses and other current liabilities 125,957 165,047 Deferred revenue 19,973 23,804 Current maturities of long-term debt 3,930 3,950 Total current liabilities 303,278 425,785 Long-term debt – net 383,431 384,960 Long-term lease liabilities 16,452 18,731 TRA liability — 155,720 Other liabilities 18,834 36,865 Total liabilities 721,995 1,022,061 Commitments and contingencies (Note 18) Redeemable noncontrolling interests — 352,922 Shareholders' equity (deficit): Class A common stock, $ 0.0001 par value; 500,000,000 shares authorized, 11,712,157 and 7,190,975 shares issued and outstanding at December 31, 2025 and 2024, respectively 23 14 Class B common stock, $ 0.0001 par value; 250,000,000 shares authorized, zero and 3,811,250 shares issued and outstanding at December 31, 2025 and 2024, respectively — 8 Additional paid-in capital 1,368,067 1,267,710 Treasury stock, at cost, 949,665 and 571,687 shares at December 31, 2025 and 2024, respectively ( 93,920 ) ( 75,568 ) Accumulated deficit ( 1,359,472 ) ( 930,171 ) Accumulated other comprehensive income (loss) 173 ( 880 ) Total shareholders' equity (deficit) ( 85,129 ) 261,113 Total liabilities, redeemable noncontrolling interests, and shareholders' equity (deficit) $ 636,866 $ 1,636,096 The accompanying notes are an integral part of these financial statements. 56 VIVID SEATS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) Years Ended December 31, 2025 2024 2023 Revenues $ 570,776 $ 775,586 $ 712,879 Costs and expenses: Cost of revenues (exclusive of depreciation and amortization shown separately below) 173,438 201,854 182,184 Marketing and selling 230,562 285,146 274,096 General and administrative 173,880 202,123 159,081 Depreciation and amortization 49,392 44,238 17,178 Impairment charges 723,023 — — Change in fair value of contingent consideration — — ( 998 ) Total costs and expenses 1,350,295 733,361 631,541 Income (loss) from operations ( 779,519 ) 42,225 81,338 Interest expense – net 23,741 23,172 13,505 Other income – net ( 151,956 ) ( 3,666 ) ( 3,109 ) Loss on extinguishment of debt 801 — — Income (loss) before income taxes ( 652,105 ) 22,719 70,942 Income tax expense (benefit) 69,385 8,417 ( 42,199 ) Net income (loss) ( 721,490 ) 14,302 113,141 Net income (loss) attributable to redeemable noncontrolling interests ( 292,189 ) 4,877 38,605 Net income (loss) attributable to Class A common stockholders $ ( 429,301 ) $ 9,425 $ 74,536 Net income (loss) per Class A common stock: Basic $ ( 59.20 ) $ 1.42 $ 16.08 Diluted $ ( 69.20 ) $ 1.12 $ 5.15 Weighted average Class A common stock outstanding: Basic 7,252,290 6,616,546 4,633,926 Diluted 10,426,591 10,457,132 9,943,873 The accompanying notes are an integral part of these financial statements. 57 VIVID SEATS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Years Ended December 31, 2025 2024 2023 Net income (loss) $ ( 721,490 ) $ 14,302 $ 113,141 Other comprehensive income (loss): Foreign currency translation adjustment 1,502 ( 2,672 ) 1,152 Unrealized gain (loss) on Note ( 120 ) 119 196 Total other comprehensive income (loss) 1,382 ( 2,553 ) 1,348 Comprehensive income (loss) ( 720,108 ) 11,749 114,489 Net income (loss) attributable to redeemable noncontrolling interests ( 292,189 ) 4,877 38,605 Other comprehensive income (loss) attributable to redeemable noncontrolling interests: Foreign currency translation adjustment attributable to redeemable noncontrolling interests 496 ( 970 ) 511 Unrealized gain (loss) on Note attributable to redeemable noncontrolling interests ( 14 ) 44 90 Total other comprehensive income (loss) attributable to redeemable noncontrolling interests 482 ( 926 ) 601 Comprehensive income (loss) attributable to Class A common stockholders $ ( 428,401 ) $ 7,798 $ 75,283 The accompanying notes are an integral part of these financial statements. 58 VIVID SEATS INC. CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (in thousands, except share/unit data) Class A common stock Class B common stock Treasury stock Redeemable noncontrolling interests Shares Amount Shares Amount Additional paid-in capital Shares Amount Accumulated deficit Accumulated other comprehensive income (loss) Total shareholders' equity (deficit) Balances at January 1, 2023 $ 862,860 4,120,539 $ 8 5,910,000 $ 12 $ 663,908 ( 217,124 ) $ ( 32,494 ) $ ( 1,014,132 ) $ — $ ( 382,698 ) Net income 38,605 — — — — — — — 74,536 — 74,536 Issuances of Class A common stock — 61,414 — — — — — — — — — Deemed contributions from former parent 1,898 — — — — 1,598 — — — — 1,598 Equity-based compensation — — — — — 24,546 — — — — 24,546 Repurchases of Class A common stock — — — — — — ( 147,451 ) ( 20,092 ) — — ( 20,092 ) Tax distributions to redeemable noncontrolling interests ( 14,304 ) — — — — — — — — — — Other comprehensive income 601 — — — — — — — — 747 747 Secondary Offerings ( 307,732 ) 2,098,750 4 ( 2,098,750 ) ( 4 ) 307,732 — — — — 307,732 Establishment of liabilities under TRA, net of tax and other tax impact of Secondary Offerings (Note 20) — — — — — ( 95,849 ) — — — — ( 95,849 ) Issuance of Class A common stock related to acquisition — 777,663 2 — — 95,495 — — — — 95,497 Termination of Option Contingent Warrants 1,094 — — — — — — — — — — Subsequent remeasurement of redeemable noncontrolling interests, net of tax impacts ( 101,280 ) — — — — 99,000 — — — — 99,000 Balances at December 31, 2023 481,742 7,058,366 14 3,811,250 8 1,096,430 ( 364,575 ) ( 52,586 ) ( 939,596 ) 747 105,017 Net income 4,877 — — — — — — — 9,425 — 9,425 Issuances of Class A common stock — 142,994 — — — — — — — — — Deemed contributions from former parent 3,512 — — — — 6,073 — — — — 6,073 Equity-based compensation — — — — — 41,604 — — — — 41,604 Repurchases of Class A common stock, net of tax impacts — — — — — ( 1,952 ) ( 207,112 ) ( 22,982 ) — — ( 24,934 ) Tax distributions to redeemable noncontrolling interests ( 10,014 ) — — — — — — — — — — Other comprehensive loss ( 926 ) — — — — — — — — ( 1,627 ) ( 1,627 ) Net settlement of equity incentive awards — ( 10,385 ) — — — ( 714 ) — — — — ( 714 ) Subsequent remeasurement of redeemable noncontrolling interests ( 126,269 ) — — — — 126,269 — — — — 126,269 Balances at December 31, 2024 352,922 7,190,975 14 3,811,250 8 1,267,710 ( 571,687 ) ( 75,568 ) ( 930,171 ) ( 880 ) 261,113 Net loss ( 292,189 ) — — — — — — — ( 429,301 ) — ( 429,301 ) Issuances of Class A common stock — 357,979 — — — — — — — — — Equity-based compensation — — — — — 37,384 — — — — 37,384 Repurchases of Class A common stock — — — — — — ( 377,978 ) ( 18,352 ) — — ( 18,352 ) Tax distributions to redeemable noncontrolling interests ( 1,928 ) — — — — — — — — — — Other comprehensive income 482 — — — — — — — — 900 900 Net settlement of equity incentive awards — ( 50,880 ) — — — ( 1,886 ) — — — — ( 1,886 ) Repurchase and retirement of fractional shares resulting from Reverse Stock Split — ( 189 ) — — — ( 5 ) — — — — ( 5 ) Subsequent remeasurement of redeemable noncontrolling interests ( 11,989 ) — — — — 11,989 — — — — 11,989 Mergers and exchange of Class B common stock for Class A common stock in connection with Corporate Simplification ( 47,298 ) 3,811,250 8 ( 3,811,250 ) ( 8 ) 47,562 — — — 153 47,715 Issuance of Class A common stock to terminate TRA — 403,022 1 — — 5,001 — — — — 5,002 Reclassification of Intermediate Warrants from liability instruments to equity instruments — — — — — 312 — — — — 312 59 VIVID SEATS INC. CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (in thousands, except share/unit data) Balances at December 31, 2025 $ — 11,712,157 $ 23 — $ — $ 1,368,067 ( 949,665 ) $ ( 93,920 ) $ ( 1,359,472 ) $ 173 $ ( 85,129 ) The accompanying notes are an integral part of these financial statements. 60 VIVID SEATS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2025 2024 2023 Cash flows from operating activities Net income (loss) $ ( 721,490 ) $ 14,302 $ 113,141 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 49,392 44,238 17,178 Amortization of leases 1,514 1,697 818 Amortization of deferred financing costs 970 988 924 Equity-based compensation 36,734 50,429 27,614 Change in fair value of Intermediate Warrants ( 5,924 ) ( 4,044 ) ( 971 ) Loss on asset disposals 555 277 685 Change in fair value of derivative asset 2,201 800 ( 536 ) Deferred income tax expense (benefit) 74,746 1,246 ( 44,859 ) Non-cash interest expense (income) – net 651 ( 890 ) ( 261 ) Foreign currency loss (gain) – net ( 126 ) 4,056 ( 2,177 ) Adjustment of liabilities under TRA ( 150,719 ) ( 6,166 ) 574 Loss on extinguishment of debt 801 — — Impairment charges 723,023 — — Write-off of Sponsorship Loan 2,024 — — Change in fair value of contingent consideration — — ( 998 ) Changes in operating assets and liabilities: Accounts receivable – net 17,545 9,776 ( 17,129 ) Inventory – net 1,434 1,413 ( 8,184 ) Prepaid expenses and other current assets 5,820 1,161 ( 1,176 ) Accounts payable ( 79,463 ) ( 23,691 ) 53,817 Accrued expenses and other current liabilities ( 35,787 ) ( 30,164 ) 1,336 Deferred revenue ( 3,831 ) ( 10,870 ) 827 Long-term lease liabilities ( 2,302 ) ( 994 ) — Other assets and liabilities – net ( 9,367 ) 358 6,697 Net cash provided by (used in) operating activities ( 91,599 ) 53,922 147,320 Cash flows from investing activities Purchases of property and equipment ( 2,164 ) ( 4,227 ) ( 895 ) Purchases of personal seat licenses ( 983 ) ( 737 ) ( 542 ) Investments in developed technology ( 16,108 ) ( 19,014 ) ( 11,339 ) Purchases of seat images ( 919 ) ( 347 ) — Disbursement of Sponsorship Loan — ( 2,000 ) — Payments toward Acquired Domain Name Obligation — ( 417 ) — Transfer of cash consideration during 2023 Acquisitions, net of cash acquired — — ( 206,865 ) Investment in Note and Warrant — — ( 6,000 ) Net cash used in investing activities ( 20,174 ) ( 26,742 ) ( 225,641 ) Cash flows from financing activities Payments of 2022 First Lien Loan — ( 689 ) ( 2,750 ) Payments of Shoko Chukin Bank Loan — ( 2,655 ) ( 279 ) Proceeds from 2024 First Lien Loan — 125,500 — Repurchases of Class A common stock ( 18,295 ) ( 22,982 ) ( 20,092 ) Tax distributions to redeemable noncontrolling interests ( 1,689 ) ( 10,014 ) ( 14,304 ) Payments of taxes related to net settlement of equity incentive awards ( 1,886 ) ( 714 ) — Payment of deferred financing costs and other debt-related expenses ( 162 ) ( 315 ) — Payment of liabilities under TRA ( 4,005 ) ( 77 ) — Payments of 2024 First Lien Loan ( 76,986 ) ( 1,975 ) — Proceeds from 2025 First Lien Loan 76,986 — — Payments of 2025 First Lien Loan ( 2,948 ) — — Payments toward Acquired Domain Name Obligation ( 2,000 ) — — Mergers and exchange of Class B common stock for Class A common stock in connection with Corporate Simplification 1,621 — — Repurchase and retirement of fractional shares resulting from Reverse Stock Split ( 5 ) — — Cash paid for milestone payments — — ( 6,005 ) Net cash provided by (used in) financing activities ( 29,369 ) 86,079 ( 43,430 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 200 ) ( 1,045 ) 1,895 Net increase (decrease) in cash, cash equivalents, and restricted cash ( 141,342 ) 112,214 ( 119,856 ) Cash, cash equivalents, and restricted cash – beginning of period 244,648 132,434 252,290 Cash, cash equivalents, and restricted cash – end of period $ 103,306 $ 244,648 $ 132,434 The accompanying notes are an integral part of these financial statements. 61 VIVID SEATS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Supplemental disclosures of cash flow information Cash paid for interest $ 27,681 $ 19,498 $ 19,330 Cash paid for income taxes $ 6,369 $ 5,469 $ 4,021 Cash paid for operating lease liabilities $ 3,360 $ 3,377 $ 1,165 Right-of-use assets obtained in exchange for operating lease liabilities $ — $ 4,663 $ — Supplemental disclosures of non-cash investing and financing activities Equity-based compensation expense related to capitalized development costs $ 650 $ 766 $ 428 Excise taxes related to repurchases of Class A common stock recorded in Accrued expenses and other current liabilities $ 57 $ — $ — Issuance of Class A common stock to terminate TRA $ 5,001 $ — $ — Reclassification of Intermediate Warrants from liability instruments to equity instruments $ 312 $ — $ — Tax distribution to redeemable noncontrolling interests recorded in Prepaid expenses and other current assets $ 239 $ — $ — Property and equipment obtained through tenant improvement allowance $ — $ 651 $ — Domain obtained through Acquired Domain Name Obligation $ — $ 17,348 $ — Reduction of deferred tax assets under the repurchases of Class A common stock, net of tax impacts $ — $ 1,952 $ — Transfer of non-cash consideration during Vegas.com Acquisition $ — $ — $ 95,497 Establishment of liabilities under TRA $ — $ — $ 165,202 Establishment of deferred tax assets under Secondary Offerings and other equity transactions $ — $ — $ 67,073 The accompanying notes are an integral part of these financial statements. 62 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 1. 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, “ we ,” “ us ,” and “ our ”), provide an online ticket marketplace that enables consumers to easily discover and purchase tickets to live events and attractions and book hotel rooms and packages. In our Marketplace segment, we primarily act as an intermediary between ticket buyers, sellers, and partners, while offering products and services that allow ticket sellers 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. GAAP ”). 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. The Merger Transaction VSI was incorporated in March 2021 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, Hoya Intermediate, Horizon Sponsor, LLC (“ Horizon Sponsor ”), and Hoya Topco, LLC (“ Hoya Topco ”). The Merger Transaction was consummated in October 2021 and, as a result, we became a publicly traded company. The Merger Transaction was accounted for as a reverse recapitalization, with Hoya Intermediate treated as the accounting acquirer. 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, we: • issued shares of Class A common stock, which are listed on the Nasdaq Global Select Market under the trading symbol “SEAT”; • issued shares of Class B common stock to Hoya Topco, which provided the legacy Hoya Intermediate unitholders with a controlling interest in VSI, and all of which shares were subsequently exchanged for shares of Class A common stock and cancelled in connection with the Corporate Simplification (as defined herein); • issued several series of warrants (as described in Note 15, Financial Instruments ); and • entered into a Tax Receivable Agreement (the “ TRA ”) with the existing Hoya Intermediate unitholders, which was subsequently terminated in connection with the Corporate Simplification (as described under “TRA” in Note 2, Summary of Significant Accounting Policies , and in Note 20, Income Taxes) . Reverse Stock Split On August 5, 2025, we effected a 1-for-20 reverse stock split of our common stock, pursuant to which every 20 shares of Class A and Class B common stock were combined into one share of Class A and Class B common stock, respectively (the “ Reverse Stock Split ”). All share and per share amounts included in this Report have been adjusted to reflect the Reverse Stock Split. The Reverse Stock Split affected all stockholders uniformly and did not affect any such holder’s percentage ownership interest in our company or proportionate voting power. However, if the Reverse Stock Split would have resulted in a stockholder holding fractional shares because the number of shares they held before the Reverse Stock Split was not evenly divisible by the split ratio, we instead repurchased such fractional shares for cash and retired them from circulation, resulting in a less than $ 0.1 million cash outlay. The repurchase and retirement of such fractional shares is recorded as a separate component of both Class A common stock (for the number of shares that were repurchased and retired) and Additional paid-in capital (for the amount of the cash payment) in the Consolidated Statements o f Equity (Deficit). The Reverse Stock Split did not affect the number of authorized shares or the par value of our common stock. 63 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Corporate Simplification On October 19, 2025, we entered into a Corporate Simplification Agreement (the “ CSA ”) with Hoya Intermediate and the TRA Parties named therein (including Hoya Topco). Pursuant to the CSA and the ancillary agreements described therein, a series of transactions was consummated over the two business days ending on October 31, 2025 that, among other things, simplified our corporate structure (such transactions, collectively, the “ Corporate Simplification ”). In connection with the Corporate Simplification, among other things: (i) three Blocker Corporations (as defined in the CSA) merged with and into three of our wholly owned subsidiaries, respectively, such that the Blocker Corporations became our wholly owned subsidiaries; (ii) all outstanding shares of Class B common stock (and corresponding common units of Hoya Intermediate (“ Intermediate Units ”)) were exchanged for an equal number of shares of Class A common stock, following which we cancelled all outstanding shares, and instruments representing the right to purchase shares, of Class B common stock; (iii) the warrant agreements relating to the Intermediate Warrants (as defined herein) were amended to, in lieu of providing for the right to purchase Intermediate Units and allowing for cash redemption at the discretion of the holder, instead provide for the right to purchase equal numbers of shares of Class A common stock at equal exercise prices and not allow for cash redemption; (iv) all rights and obligations under the TRA and Hoya Intermediate’s Limited Liability Company Agreement were terminated (in each case other than certain terms thereof that expressly survived); and (v) w e issued an aggregate of 403,022 shares of Class A common stock to the TRA Parties. 2. Summary of Significant Accounting Policies Use of Estimates We use estimates and assumptions in the preparation of our consolidated financial statements in accordance with U.S. GAAP. 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. Actual financial results could differ significantly from these estimates. The significant estimates underlying our consolidated financial statements include: the accrual for future customer compensation and the related recovery of our future customer compensation asset; breakage rates related to customer credits; usage assumptions for our rewards loyalty program (the “ Vivid Seats Rewards Program ”); inventory valuation; valuation of equity-based compensation; valuation of certain financial instruments; valuation of acquired intangible assets and goodwill; valuation of earnouts issued in connection with our acquisitions of Betcha Sports, Inc. (“ Betcha ,” which we rebranded as Vivid Picks, LLC, or “ Vivid Picks ”); useful life of definite-lived intangible assets and other long-lived assets; recoverability of goodwill, indefinite-lived intangible assets, definite-lived intangible assets and long-lived assets; income taxes and valuation allowances. C ash and Cash Equivalents Cash and cash equivalents include all cash balances and highly liquid investments purchased with original maturities of three months or less. Our cash and cash equivalents consist primarily of domestic and foreign bank accounts, interest-bearing deposit accounts and money market accounts managed by third-party financial institutions. Cash and cash equivalents are valued by us based on quoted prices in an active market, which represent a Level 1 measurement within the fair value hierarchy. Cash and cash equivalents held in bank accounts may exceed the Federal Deposit Insurance Corporation insurance limits. To reduce credit risk, we monitor the credit standing of the financial institutions that hold our cash and cash equivalents. However, balances could be impacted in the future if the underlying financial institutions fail. As of December 31, 2025 and 2024 , we have not experienced any loss or lack of access to our cash and cash equivalents. Restricted Cash Restricted cash includes cash and cash equivalents that are restricted through legal contracts or regulations and letters of credit required by certain vendors. 64 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Foreign Currency Translation Adjustments Our reporting currency is the U.S. dollar. Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date. Revenues and expenses of foreign operations are translated at the weighted average rate of exchange during the applicable period. 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 (deficit). Net gains and losses resulting from the impact of exchange rate changes on transactions denominated in non-functional currencies are recorded in Other income – net in the Consolidated Statements of Operations in the period in which they occur. Business Combinations We account for business combinations using the acquisition method. Under this method, the purchase price of an acquisition is allocated to the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our consolidated financial statements. As a result, we may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date) with the corresponding offset to goodwill. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from customer and buyer relationships, trade names, acquired developed technology and discount rates. Acquisition-related costs, including advisory, legal, accounting, valuation, and other similar costs, are expensed in the periods in which they are incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date. 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 cancelled events and commissions due from insurance purchased by ticket buyers. Credit risk with respect to accounts receivable from payment processing entities is limited due to the consolidation of those receivables with large financial institutions and the frequency with which the receivables turn over. Accounts receivable balances are stated net of allowance for credit losses and bad debt expense is recorded in the Consolidated Statements of Operations as a reduction of Revenues. Inventory – Net Inventory consists primarily of tickets to live events purchased by our Resale segment. All inventory is valued at the lower of cost or net realizable value, determined by the specific identification method. 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, 2025, 2024, and 2023, we incurred inventory write-downs of $ 6.0 million, $ 7.0 million, and $ 4.7 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. Depreciation is computed using the straight-line method over the following estimated useful lives: Asset Class Estimated Useful Life Computer equipment 5 years Purchased software 3 years Furniture and fixtures 7 years Leasehold improvements are amortized over the shorter of the term of the lease or the improvements’ estimated useful lives. 65 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Leases We determine if an arrangement is or contains a lease at inception and classify each lease as operating or financing. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. 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 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. Goodwill – Net and Intangible Assets – Net Goodwill represents the excess purchase price over the fair value of the net assets acquired. Intangible assets other than goodwill primarily consist of customer and supplier relationships, acquired developed technology, capitalized development costs, and trademarks. We evaluate goodwill and our indefinite-lived intangible assets for impairment annually on October 31 or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. We have the option to assess goodwill and our indefinite-lived intangible assets for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit or the indefinite-lived intangible assets is less than its carrying value. If it is determined that the reporting unit’s or the indefinite-lived intangible assets’ fair value is more likely than not less than its carrying value, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the reporting unit’s or the indefinite-lived intangible assets’ fair value. 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 goodwill. If the fair value of the indefinite-lived intangible assets is less than the carrying value, we recognize an impairment equal to the difference. We determined a triggering event had occurred during the year ended December 31, 2025, which is further discussed in Note 10, Goodwill - Net and Intangible Assets - Net. No impairment triggering events to our goodwill and indefinite-lived intangible assets were identified during the years ended December 31, 2024 and 2023. 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 the corresponding 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 fair value. No impairment charges related to our definite-lived intangible assets were recognized during the years ended December 31, 2025, 2024, and 2023. Definite-lived intangible assets are amortized on a straight-line basis over their estimated period of benefit, over the following estimated useful lives: Asset Class Estimated Useful Life Supplier relationships 4 - 5 years Customer relationships 2 - 5 years Acquired developed technology 3 - 5 years Capitalized development costs 3 years Acquired Domain Name 15 years Seat images 3 years 66 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Capitalized Development Cost s & Cloud Computing Arrangements Implementation Costs We incur costs related to internal-use software and website development. Costs incurred in both the preliminary project and post-implementation stages of development are expensed as incurred. Qualifying development costs, including those incurred for upgrades and enhancements that result in additional functionality to existing software, are capitalized. 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 expenses 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 platform. 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. We estimate breakage based on historical usage trends for credits issued by us and available data on comparable programs. These estimates could be impacted by changes in credit usage rates, or in the determination of which credits are subject to escheatment, the effects of which could be material to our consolidated financial statements. When customer credits are used to make a purchase, revenue is recognized for the new transaction. Accrued Future Customer Compensation Provisions for accrued future customer compensation are recorded 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 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 our estimate of the likelihood of future event cancellations, are recorded in the Consolidated Statements of Operations as a component of Revenues. 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. Income Taxes Following the Merger Transaction, our legal parent entity is VSI. We are subject to income taxes at the U.S. federal, state, and local levels for income tax purposes, including with respect to our allocable share of any taxable income (loss) of Hoya Intermediate. For periods prior to the Corporate Simplification, Hoya Intermediate was treated as a partnership for federal and state income tax purposes and was generally not subject to entity level income taxes. During those periods, Hoya Intermediate’s taxable income (loss) was passed through to its members, including VSI and Hoya Topco, each of whom were responsible for their own U.S. federal and state income taxes. Following the Corporate Simplification, Hoya Intermediate continued to be treated as a partnership, with VSI now indirectly holding all of its units. See Note 1, Background and Basis of Presentation , for more information. During the three months and year ended December 31, 2025, VSI also completed an internal legal entity restructuring to further simplify its organizational structure and align its U.S. operations within a single U.S. consolidated tax group. The restructuring included a series of stock and partnership interest contributions leading to the conversion of Hoya Intermediate from a partnership to a disregarded entity for U.S. federal and state income tax purposes, with VSI continuing to hold all of its units. As a result, we now account for our deferred taxes related to the operations of Hoya Intermediate based on the financial accounting to income tax basis differences of the 67 VIVID SEATS INC. NOTES to the Consolidated Financial Statements assets and liabilities held by Hoya Intermediate where prior to the Corporate Simplification and the legal entity restructuring, we accounted for our deferred taxes related to the operations of Hoya Intermediate based on the financial accounting to income tax basis differences of our investment in Hoya Intermediate. Income taxes are accounted for using the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences on differences between the carrying amounts of assets and liabilities and their respective tax basis, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred assets and liabilities of a change in tax rates is recognized in income (loss) in the period when the change is enacted. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realization of the deferred tax assets is dependent on the amount of our future taxable income (loss). Interest and penalties related to the underpayment of income taxes are recorded in Income tax expense (benefit) in the Consolidated Statements of Operations. To date, interest and penalties related to the underpayment of income taxes have not been material. 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 from such tax basis) in long-lived assets owned directly or indirectly by Hoya Intermediate or 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 Corporate Simplification, all rights and obligations under the TRA were terminated (other than certain terms thereof that expressly survived), including $ 5.8 million of cash payments that would have otherwise been due in the first quarter of 2026, in exchange for the issuance of 403,022 shares of Class A common stock. As a result of the Corporate Simplification, we will no longer have a TRA liability. See Note 1, Background and Basis of Presentation , and Note 20, Income Taxes , for more information. 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 refinancing of our term debt on February 5, 2025, we (i) recognized an expense for certain third-party fees incurred in relation to the modification of existing debt, which is recorded in Other income – net in the Consolidated Statements of Operations; (ii) recognized an expense for losses incurred in relation to the extinguishment of historical debt, which is recorded in Loss on extinguishment of debt in the Consolidated Statements of Operations; and (iii) capitalized certain third-party fees incurred in relation to the issuance of new debt, which is recorded in Long-term debt – net in the Consolidated Balance Sheets. See Note 13, Long-Term Debt – Net , for more information. 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. 68 VIVID SEATS INC. NOTES to the Consolidated Financial Statements • Level 2 — Measurements that include other inputs that are directly or indirectly observable in the marketplace. • Level 3 — Measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. These fair value measurements require significant judgment. Our financial assets and liabilities (i.e., investments, long-term debt, and certain long-term financial instruments) are measured at fair value on a recurring basis and presented in Note 11, Investments and Fair Value Measurements , Note 13, Long-Term Debt – Net, and Note 15, Financial Instruments . Our non-financial assets (i.e., goodwill, intangible assets, and certain long-lived assets) are measured at fair value on a nonrecurring basis utilizing Level 3 inputs and presented in Note 10, Goodwill – Net and Intangible Assets – Net . Other short-term financial instruments (i.e., accounts receivable and accounts payable) are carried at cost, which approximates their fair value. We did not have any transfers of financial instruments between valuation levels during the years ended December 31, 2025, 2024, and 2023 . Warrants In connection with the Merger Transaction and the Corporate Simplification, we issued and amended several types of warrants, as described in Note 15, Financial Instruments . 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. Because the Intermediate Warrants (as defined herein) allowed for cash redemption at the discretion of the holder, they met the criteria to be classified as liability instruments and were recorded in Other liabilities in the Consolidated Balance Sheets. The warrant liability was subject to a fair value remeasurement each period with an offsetting adjustment recorded in Other income – net in the Consolidated Statements of Operations. Conversely, because the Public Warrants, Private Warrants, Exercise Warrants, and Amended Intermediate Warrants (each as defined herein) do not allow for cash redemption at the discretion of the holder, they meet the criteria to be classified as equity instruments. Redeemable Noncontrolling Interests Prior to the Corporate Simplification, Hoya Topco held 100 % of our Class B common stock and 36.9 % of the Intermediate Units, which represented a redeemable noncontrolling interest in VSI. At its discretion, Hoya Topco had the right to exchange its Intermediate Units for shares of Class A common stock on a one-to-one basis or for cash proceeds of equal value at the time of redemption. See Note 16, Redeemable Noncontrolling Interests , for additional detail on Hoya Topco’s former right to exchange its Intermediate Units. As the redeemable noncontrolling interests were redeemable upon the occurrence of an event not solely within our control, we classified them as temporary equity. Our redeemable noncontrolling interests were initially measured as Hoya Topco’s share in the net assets of Hoya Intermediate upon consummation of the Merger Transaction. Subsequent remeasurements of our redeemable noncontrolling interests (which were based on the fair value of the Class A common stock) were recorded as a deemed dividend each reporting period, which reduced Retained earnings, if any, or Additional paid-in capital in the Consolidated Balance Sheets. In connection with the Corporate Simplification, all of the Intermediate Units previously held by Hoya Topco (and corresponding shares of Class B common stock) were exchanged for an equal number of shares of Class A common stock. As a result, our redeemable noncontrolling interests were extinguished and Hoya Intermediate is now a wholly owned subsidiary of VSI. Equity-Based Compensation 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. We award stock options to certain of our employees and consultants. We account for forfeitures of outstanding but unvested grants in the period they occur. 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 expected term, the expected volatility of our common stock, the risk-free interest rate, and the expected dividend yield. Expenses related to grants of equity-based awards are 69 VIVID SEATS INC. NOTES to the Consolidated Financial Statements recognized as equity-based compensation and recorded in General and administrative expenses in the Consolidated Statements of Operations. Prior to the Merger Transaction, certain members of management received equity-based compensation awards for 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. On June 10, 2024, the Board of Managers of Hoya Topco (the “ Hoya Topco Board ”) approved the redemption, repurchase, and cancellation by Hoya Topco 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 Annual Report on Form 10-K). Accordingly, we recognized equity-based compensation expense related to the profits interests of $ 4.6 million during the year ended December 31, 2024. S ee Note 21, Equity-Based Compensation , for more information. On June 10, 2024, the Hoya Topco Board also approved the repurchase and cancellation by Hoya Topco 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 equity-based compensation expense related to the phantom units of $ 5.0 million during 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, 2025 . Revenue Recognition We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ ASC 606 ”). We record 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. Marketplace Segment In our Marketplace segment, we primarily act as an intermediary between ticket buyers, sellers, and partners, for which we earn revenue from processing ticket sales for live events and facilitating the booking of hotel rooms and packages through: (a) our Owned Properties, which consist of (i) the Vivid Seats mobile app and website, (ii) Wavedash (as defined herein), and (iii) Vegas.com (as defined herein); and (b) our Private Label Offering, which consists of numerous distribution partners. Using our online platform, we facilitate customer payments, coordinate ticket deliveries, and provide customer service. We do not hold ticket inventory in our Marketplace segment. The amount of Marketplace revenue earned in a given period is primarily represented by service and delivery fees charged to ticket buyers. We also earn Marketplace revenue from referral fees charged to third-party providers of event insurance that we offer to ticket buyers. Until it ceased operations on July 18, 2025, we also earned Marketplace revenue from Vivid Picks, a real-money daily fantasy sports mobile app, which represented the difference between cash entry fees collected and cash amounts paid out to users for winning picks, less customer promotions and incentives. Our performance obligation for Marketplace transactions relates to facilitating ticket sales between buyers, sellers, and partners. For live events, our performance obligation is satisfied at the time the Marketplace order is confirmed, 70 VIVID SEATS INC. NOTES to the Consolidated Financial Statements as control of the asset and the related rights of ownership transfer to the ticket buyer at that time. For hotels and tours, our performance obligation is satisfied at the time of check-in, as the ticket buyer is unable to control the asset until that point. For event insurance, our performance obligation is satisfied at the time the customer makes a purchase from the third-party insurance provider during customer checkout, as control of the asset and the related rights of ownership transfer to the ticket buyer at that time. In all of these transactions, we act as an agent due to the fact that we do not control the asset prior to satisfying our performance obligation. Payment from the ticket buyer is generally due at the time of sale. Our sales terms generally provide that we will compensate the ticket buyer for the total amount of the purchase if an event is cancelled, the ticket is invalid, or the ticket is delivered after the promised time. In certain circumstances for travel reservations, we may allow ticket buyers to initiate returns or cancel. We have determined this is considered a stand-ready obligation to provide a return that is not a separate performance obligation, but is an element of variable consideration, which results in a reduction to revenue. The revenue reversal is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets when the ticket buyer has yet to be compensated. We estimate the future customer compensation liability and the corresponding charge against revenue using the expected value method, which best predicts customer compensation for future event cancellations. 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 that occurred 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. For event insurance, payment from the third-party provider is due to us within 30 days from being invoiced. This revenue is included within all categories of Marketplace disaggregated revenue described in Note 4, Revenue Recognition . In certain instances, ticket buyers are compensated with credit to be used on future purchases. When a credit is redeemed, revenue is recognized for the newly placed order. Breakage income from customer credits that are not expected to be used, and not subject to escheatment, is estimated and recognized as revenue in proportion to the pattern of redemption for the customer credits that are used. Resale Segment In our Resale segment, we primarily acquire tickets to resell on secondary ticket marketplaces, including our own. The amount of Resale revenue earned in a given period is primarily represented by the gross value of the ticket. Our performance obligation for Resale transactions relates to transferring control of live event tickets to buyers. Our performance obligation is satisfied at the time the Resale order is confirmed in the secondary ticket marketplace, as control of the asset and the related rights of ownership transfer to the ticket buyer at that time. In all of these transactions, we act as a principal due to the fact that we control the asset prior to satisfying our performance obligation. Payment from the secondary ticket marketplace is typically due upon delivery of the ticket or after the event has passed. Secondary ticket marketplace terms and conditions require ticket sellers to repay amounts received for events that are cancelled or tickets that are invalid or delivered after the promised time. We have determined that this is considered a stand-ready obligation to provide a return that is not a separate performance obligation, but is an element of variable consideration, which results in a reduction to revenue. The revenue reversal is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets when the ticket buyer has yet to be compensated. We estimate the future customer compensation liability and the corresponding charge against revenue using the expected value method, which best predicts customer compensation for future event cancellations. To the extent we estimate that a portion of the charge is recoverable from the event host, we record the recovery of future customer compensation asset in Prepaid expenses and other current assets in the Consolidated Balance Sheets. When our Resale segment sells a ticket on our own secondary ticket marketplace, the service fee is recorded in Marketplace revenues in the Consolidated Statements of Operations and the sales price of the ticket is recorded in Resale revenues in the Consolidated Statements of Operations. 71 VIVID SEATS INC. 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 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. The credits earned in the program represent a material right to the ticket buyer and constitute an additional performance obligation for us. As such, we defer revenue based on expected future usage and recognize the deferred revenue as credits are redeemed. Deferred revenue also consists of service fees on hotel and tour transactions where check-in has not yet occurred. 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 & 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. The uncollected indirect tax liability, which is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets, increases when accruals are made in jurisdictions where we believed it was probable we should remit payment to U.S. and foreign governmental tax authorities before all required amounts are collected from the customer and decreases when we receive abatements and/or recognize other reductions to the balance. The net expense/benefit recognized related to the liability for uncollected indirect taxes (including sales taxes) is recorded in General and administrative expenses in the Consolidated Statements of Operations. Advertising Costs We utilize various forms of advertising, including paid search, brand partnerships, email marketing and other forms of media. Advertising costs, which are expensed as incurred and recorded in Marketing and selling expenses in the Consolidated Statements of Operations, were $ 231.3 million, $ 284.7 million, and $ 273.5 million for the years ended December 31, 2025, 2024, and 2023 , respectively. Shipping & Handling Shipping and handling charges to customers are recorded in Revenues in the Consolidated Statements of Operations. Shipping and handling costs incurred by us are treated as fulfillment activities and therefore are recorded in Cost of revenues in the Consolidated Statements of Operations. 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, 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: Issued Accounting Standards Adopted Financial Instruments – Credit Losses In 2016, the Financial Accounting Standards Board (the “ FASB ”) issued Accounting Standard Update (“ ASU ”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities will measure credit losses for financial assets and certain other instruments that are not measured at fair value through net income. The new expected credit loss impairment model requires immediate recognition of estimated credit losses expected to occur. Additional disclosures are required regarding assumptions, models, and methods for estimating the credit losses. ASU 2019-10, Financial Instruments-Credit Losses (Topic 326), 72 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates , deferred the effective date for non-public companies. The standard is effective for non-public companies for fiscal years beginning after December 15, 2022. We adopted these requirements as of January 1, 2023 with no material impact on our consolidated financial statements. Reference Rate Reform In 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting , as modified in 2021. 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 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. We adopted these requirements as of January 1, 2023 with no material impact on our consolidated financial statements. Acquired Contract Assets and Contract Liabilities In 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. 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. 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 On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments should be applied retrospectively to all prior periods presented in an entity’s financial statements. We adopted the amendments during the year ended December 31, 2024 with no material impact on our consolidated financial statements, other than the impact thereof on our segment reporting footnote. See Note 5, Segment Reporting , for more information. Income Taxes On December 14, 2023 , the FASB issued ASU 2023-09 , Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) , which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendments are intended to enhance the transparency and decision usefulness of income tax disclosures. We adopted the amendments during the year ended December 31, 2025 with no material impact on our consolidated financial statements, other than the impact thereof on our income taxes footnote. See Note 20, Income Taxes , for more information. Issued Accounting Standards Not Yet Adopted Disaggregation of Income Statement Expenses On November 4, 2024, the FASB issued ASU 2024-03, Income Statement Reporting — Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . The amendments are intended to improve 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 73 VIVID SEATS INC. NOTES to the Consolidated Financial Statements retrospective application. We are currently evaluating the impact of adopting the amendments on our future consolidated financial statements. Software Costs On September 18, 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which amends certain aspects of the accounting for and disclosure of software costs under ASC Subtopic 350-40, Intangibles — Goodwill and Other — Internal-Use Software . The amendments will be effective for annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The amendments may be applied prospectively, retrospectively, or via a modified prospective transition method. We are currently evaluating the impact of adopting the amendments on our future consolidated financial statements. Interim Reporting On December 8, 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which updates the guidance in ASC Topic 270, Interim Reporting , by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the last annual reporting period that have a material impact on the entity. The amendments will be effective for interim periods beginning after December 15, 2027. The amendments may be applied prospectively, or retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. We are currently evaluating the impact of adopting the amendments on our future condensed consolidated financial statements, but do not expect the impact to result in incremental interim financial statement disclosures. 3. Business Acquisitions 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 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 (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 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 was 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. 74 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 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 $ 1,868 Accounts receivable 2,469 Prepaid expenses and other current assets 2,175 Property and equipment 264 Intangible assets 130,549 Goodwill 185,276 Right-of-use assets 779 Other assets 449 Accounts payable ( 34,589 ) Accrued expenses and other current liabilities ( 11,291 ) Deferred revenue ( 1,864 ) Long-term lease liabilities ( 69 ) Deferred tax liability ( 27,721 ) Purchase price $ 248,295 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: Cost Estimated Useful Life Trade name $ 43,669 Indefinite Supplier relationships 37,160 4 years Customer relationships 27,590 3 years Acquired developed technology 22,130 4 years Acquired intangible assets $ 130,549 Unaudited Pro Forma Financial Information Assuming the Vegas.com Acquisition had occurred on January 1, 2022, the unaudited pro forma Revenues and Income before income taxes presented in the Consolidated Statements of Operations for the year ended December 31, 2023 would have been $ 797.9 million and $ 79.0 million, respectively. 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 is it necessarily indicative of future results. The unaudited pro forma information presented above reflects the following adjustments, where applicable, assuming the Vegas.com Acquisition had occurred on January 1, 2022: (i) incremental amortization expenses related to the long-lived intangible assets acquired in the Vegas.com Acquisition; (ii) reclassification of transaction costs incurred in connection with the Vegas.com Acquisition; (iii) alignment of Vegas.com’s revenue recognition with our policies; and (iv) elimination of interest expenses incurred by Vegas.com prior to the Vegas.com 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 $ 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 purchase price at closing with cash on hand. 75 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 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 million (approximately $ 3.1 million) , which had an original maturity date of June 24, 2026 and was subject to a fixed interest rate of 1.3 % per annum. On April 4, 2024, we paid off the Shoko Chukin Bank Loan balance in its entirety. See No te 13, Long-Term Debt – Net, for more information. The goodwill recognized in the Wavedash Acquisition was 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. 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 $ 18,390 Accounts receivable 2,182 Inventory 49 Prepaid expenses and other current assets 259 Property and equipment 67 Right-of-use assets 1,927 Other assets 675 Intangible assets 31,846 Goodwill 45,351 Accounts payable ( 7,427 ) Accrued expenses and other current liabilities ( 3,901 ) Current maturities of long-term debt ( 566 ) Long-term debt ( 2,546 ) Other liabilities ( 11,981 ) Purchase price $ 74,325 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. 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: Cost Estimated Useful Life Trade name $ 2,173 Indefinite Supplier relationships 19,963 5 years Customer relationships 5,500 4 years Acquired developed technology 4,210 3 years Acquired intangible assets $ 31,846 Pro forma financial information for the Wavedash Acquisition was not considered material to our consolidated financial statements and has not been presented. 76 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Vivid Picks Acquisition On December 13, 2021 (the “ Vivid Picks Acquisition Date “), we acquired 100 % ownership of Betcha (the “ Vivid Picks Acquisition ”). In August 2022, we rebranded Betcha as Vivid Picks. Until it ceased operations on July 18, 2025, Vivid Picks was a real-money daily fantasy sports app with social and gamification features that enhance fans’ connection with their favorite live sports. The Vivid Picks Acquisition was accounted for as an acquisition of a business in accordance with the acquisition method of accounting. 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 (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, 2025, the estimated fair value of the Vivid Picks Earnouts was zero. During the year ended December 31, 2023, the estimated fair value of the Vivid Picks Earnouts decreased by $ 1.0 million. There was no change in the estimated fair value of the Vivid Picks Earnouts during the years ended December 31, 2025 and 2024. We made no payments related to the Vivid Picks Earnouts during the years ended December 31, 2025, 2024, and 2023. 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. During the year ended December 31, 2023, we paid Vivid Picks Milestone Payments of $ 6.0 million. We did no t pay any Vivid Picks Milestone Payments during the years ended December 31, 2025 and 2024. As of December 31, 2024, 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. 4. Revenue Recognition We recognize revenue in accordance with ASC 606. As discussed in Note 5, Segment Reporting , we have determined that we have two operating and reportable segments: Marketplace and Resale. The following tables present Marketplace revenues by business model and event category for the years ended December 31, 2025, 2024, and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 Owned Properties revenues $ 393,521 $ 533,086 $ 462,263 Private Label Offering revenues 56,988 114,805 135,125 Marketplace revenues $ 450,509 $ 647,891 $ 597,388 Years Ended December 31, 2025 2024 2023 Concert revenues $ 186,139 $ 283,192 $ 308,507 Sport revenues 142,564 202,220 199,837 Theater revenues 102,108 137,715 83,273 Other revenues 19,698 24,764 5,771 Marketplace revenues $ 450,509 $ 647,891 $ 597,388 During the year ended December 31, 2025, we recognized Resale revenues of $ 120.3 millio n, compared to Resale revenues of $ 127.7 million and $ 115.5 million during the years ended December 31, 2024 and 2023, respectively. 77 VIVID SEATS INC. NOTES to the Consolidated Financial Statements At December 31, 2025, Deferred revenue in the Consolidated Balance Sheets w as $ 20.0 m illion, which primarily relates to the Vivid Seats Rewards Program. Stamps earned under the Vivid Seats Rewards 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 within the next seven years . At December 31, 2024 , $ 23.8 million was recorded as Deferred revenue in the Consolidated Balance Sheets, of wh ich $ 15.4 million was recognized as revenue during the year ended December 31, 2025. At December 31, 2023 , $ 34.7 million was recorded as Deferred revenue in the Consolidated Balance Sheets, of wh ich $ 25.8 million was recognized as revenue during the year ended December 31, 2024 . 5. Segment Reporting Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the entity’s Chief Operating Decision Maker (“ CODM ”) in making decisions regarding resource allocation and performance assessment. Our 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 within our online ticket marketplace, 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. For both segments, our CODM uses contribution margin (defined as revenues less cost of revenues and marketing and selling expenses) as a means to allocate resources, evaluate performance, and make strategic decisions during the annual budgeting and forecasting process. Contribution margin forms the basis for measuring trends in performance and comparing the relative potential of various initiatives. Cost of revenues largely consist of payment processing fees for our Marketplace segment and ticket costs for our Resale segment. Marketing and selling expenses, which relate entirely to our Marketplace segment, consist almost entirely of advertising costs. Most advertising costs are aimed towards acquiring new customers online through paid search engine marketing, fees paid to our advertising affiliates and distributors, and other various digital marketing activities. However, to a lesser extent, advertising costs are also aimed towards acquiring new customers offline through traditional media channels, advertising agency costs, and partnership expenses with sports teams and other media partners. We do not report assets, capital expenditures, general and administrative expenses, or depreciation and amortization expenses by segment because our CODM does not use this information to evaluate the performance of our operating segments. The following tables summarize our segment information for the years ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, 2025 Marketplace Resale Total Revenues $ 450,509 $ 120,267 $ 570,776 Cost of revenues (exclusive of depreciation and amortization shown separately below) 72,084 101,354 173,438 Marketing and selling: Online advertising 208,507 — 208,507 Offline advertising 22,055 — 22,055 Total marketing and selling 230,562 — 230,562 Contribution margin 147,863 18,913 166,776 General and administrative 173,880 Depreciation and amortization 49,392 Impairment charges 723,023 Loss from operations ( 779,519 ) Interest expense – net 23,741 Other income – net ( 151,956 ) Loss on extinguishment of debt 801 Loss before income taxes $ ( 652,105 ) 78 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Year Ended December 31, 2024 Marketplace Resale Total Revenues $ 647,891 $ 127,695 $ 775,586 Cost of revenues (exclusive of depreciation and amortization shown separately below) 99,460 102,394 201,854 Marketing and selling: Online advertising 261,188 — 261,188 Offline advertising 23,958 — 23,958 Total marketing and selling 285,146 — 285,146 Contribution margin 263,285 25,301 288,586 General and administrative 202,123 Depreciation and amortization 44,238 Income from operations 42,225 Interest expense – net 23,172 Other income – net ( 3,666 ) Income before income taxes $ 22,719 Year Ended December 31, 2023 Marketplace Resale Total Revenues $ 597,388 $ 115,491 $ 712,879 Cost of revenues (exclusive of depreciation and amortization shown separately below) 94,557 87,627 182,184 Marketing and selling: Online advertising 239,335 — 239,335 Offline advertising 34,761 — 34,761 Total marketing and selling 274,096 — 274,096 Contribution margin 228,735 27,864 256,599 General and administrative 159,081 Depreciation and amortization 17,178 Change in fair value of contingent consideration ( 998 ) Income from operations 81,338 Interest expense – net 13,505 Other income – net ( 3,109 ) Income before income taxes $ 70,942 Substantially all of our sales occur and assets reside in the United States. 6. Accounts Receivable – Net The following table presents the major components of accounts receivable at December 31, 2025 and 2024 (in thousands): December 31, December 31, 2025 2024 Uncollateralized payment processor obligations $ 11,938 $ 28,740 Due from ticket sellers for cancellation charges 7,600 6,835 Due from distribution partners for cancellation charges 14,139 13,308 Event insurance and other commissions receivable 3,481 4,980 Other trade receivables 6,369 6,437 Accounts receivable 43,527 60,300 Less: allowance for credit losses ( 12,863 ) ( 11,985 ) Accounts receivable – net $ 30,664 $ 48,315 Accounts receivable is recorded net of the cumulative allowance for credit losses. As of December 31, 2025 and 2024, we recorded a cumulative allowance for credit losses of $ 12.9 million and $ 12.0 million, 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 ticket buyers. The cumulative allowance for credit losses increased between December 31, 2024 and 2025, primarily due to an increase in amounts due from distribution partners that are unlikely to be collected based on actual store credit usage. 79 VIVID SEATS INC. NOTES to the Consolidated Financial Statements We wrote off $ 0.2 million, $ 0.2 million, and $ 0.3 million for uncollectible accounts receivable balances during the years ended December 31, 2025, 2024, and 2023 , respectively. 7. Prepaid Expenses and Other Current Assets The following table presents the major components of prepaid expenses and other current assets at December 31, 2025 and 2024 (in thousands): December 31, December 31, 2025 2024 Recovery of future customer compensation $ 13,021 $ 20,335 Prepaid expenses 9,807 7,388 Other current assets 3,508 4,884 Prepaid expenses and other current assets $ 26,336 $ 32,607 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 $ 7.3 million between December 31, 2024 and 2025, primarily due to a decrease in estimated future event cancellations. A related provision for expected compensation to customers is recorded in Accrued expenses and other current liab ilities in the Consolidated Balance Sheets. 8. Property and Equipment – Net The following table presents the major classes of property and equipment at December 31, 2025 and 2024 (in thousands): December 31, December 31, 2025 2024 Computer equipment $ 3,470 $ 3,145 Furniture 2,936 1,996 Leasehold improvements 11,181 8,692 Construction in progress 55 2,165 Property and equipment 17,642 15,998 Less: accumulated depreciation ( 5,269 ) ( 3,431 ) Property and equipment – net $ 12,373 $ 12,567 Property and equipment is recorded net of accumulated depreciation. As of December 31, 2025 and 2024, we had recorded accumulated depreciation of $ 5.3 million and $ 3.4 million, respectively. During the years ended December 31, 2025, 2024, and 2023, we recognized an expense of $ 2.2 million, $ 1.7 million, and $ 1.4 million, respectively, for depreciation related to property and equipment, which is recorded in Depreciation and amortization expenses in the Consolidated Statements of Operations. During the years ended December 31, 2025, 2024, and 2023, we recognized a loss of $ 0.2 million, $ 0.1 million, and $ 0.1 million, respectively, for asset disposals related to property and equipment, which is recorded in General and administrative expenses in the Consolidated Statements of Operations. There were no impairment charges related to property and equipment during the years ended December 31, 2025, 2024, and 2023 . 80 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 9. Leases The following table presents the lease-related assets and liabilities in the Consolidated Balance Sheets at December 31, 2025 and 2024 (in thousands): December 31, December 31, 2025 2024 Right-of-use assets – net $ 10,515 $ 12,008 Current operating lease liabilities included in Accrued expenses and other current liabilities $ 2,307 $ 1,973 Long-term lease liabilities 16,452 18,731 Operating lease liabilities $ 18,759 $ 20,704 We entered into all of our lease contracts as a lessee. We are not acting as a lessor under any of our leasing arrangements. The vast majority of our lease contracts are real estate leases for office space. All of our leases are classified as operating. None of our leases contain any material residual value guarantees or restrictive covenants. 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 presents the weighted average remaining minimum lease term and the weighted average incremental borrowing rate at December 31, 2025 and 2024: December 31, December 31, 2025 2024 Weighted average remaining minimum lease term 7.2 years 8.2 years Weighted average incremental borrowing rate 7.7 % 8.5 % In 2021, we entered into a lease agreement for our new corporate headquarters in Chicago, Illinois. The lease commenced in 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 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. On the commencement date, we recorded the r ight-of-use 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. 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 recorded the right-of-use 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, 2025, 2024, and 2023 were $ 3.1 million, $ 3.0 million, and $ 2.0 million, respectively. Cash payments for operating lease liabilities, which are recorded as a component of cash flows from operating activities within the Consolidated Statements of Cash Flows, were $ 3.4 million, $ 3.4 million, and $ 1.2 million during the years ended December 31, 2025, 2024, and 2023, respectively. 81 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table presents the present value of our operating lease liabilities at December 31, 2025 (in thousands): Operating Leases 2026 $ 3,637 2027 3,459 2028 3,246 2029 3,318 2030 2,707 Thereafter 8,309 Total future lease payments 24,676 Less: imputed interest ( 5,917 ) Present value of lease liabilities $ 18,759 10. Goodwill – Net and Intangible Assets – Net Goodwill – Net Goodwill, which derives from our business combinations, is recorded net of accumulated impairment charges and foreign currency translation adjustments. Since our goodwill relates entirely to our Marketplace segment, there is only one reporting unit (the “ Marketplace Reporting Unit ”) that is relevant for the purpose of performing impairment assessments. At June 30, 2025, we performed a qualitative impairment assessment to determine if it was more likely than not that the fair value of the Marketplace Reporting Unit was less than its carrying value by evaluating relevant events and circumstances. After considering declines in our financial performance during the six months ended June 30, 2025, reductions in our financial outlook to reflect those declines, and changes in our Class A common stock price, among other factors, we concluded that it was no longer more likely than not that the fair value of the Marketplace Reporting Unit exceeded its carrying value as of June 30, 2025. As a result, we concluded that a triggering event had occurred and we performed a quantitative impairment test. As part of our annual impairment testing, we again performed a qualitative assessment of our goodwill at October 31, 2025 to determine if it was more likely than not that the fair value of the Marketplace Reporting Unit was less than its carrying value by evaluating relevant events and circumstances. Our financial outlook as of October 31, 2025, which reflected financial performance through October 31, 2025, was meaningfully lower than our financial outlook as of June 30, 2025, reflecting challenging industry trends extending into the fourth quarter of 2025 and declines in Private Label Offering order volume. After considering the reduced financial outlook and changes in our Class A common stock price, among other factors, we concluded that it was no longer more likely than not that the fair value of the Marketplace Reporting Unit exceeded its carrying value as of October 31, 2025. As a result, we performed a quantitative impairment test. The fair value of goodwill in the quantitative impairment tests performed as of June 30, 2025 and October 31, 2025 was determined using a combination of an income approach, which estimates fair value based upon projections of future revenues, expenses, and cash flows discounted to their respective present values, and a market approach. The valuation methodology and underlying financial information included in our determination of fair value required significant judgments by management. The principal assumptions used in our discounted cash flow analysis were (i) long-term projections of our financial performance and (ii) the weighted average cost of capital of market participants, adjusted for the risk attributable to our business and industry. The principal assumption used in the market approach was an estimate of a market-based multiple to determine estimated fair value. Based on our impairment analysis, we d etermined that the estimated fair value of the Marketplace Reporting Unit was lower than its carrying value as of both June 30, 2025 and October 31, 2025, indicating that the goodwill had been impaired. Consequently, we recognized a non-cash impairment expense of $ 660.7 million related to our goodwill during the year ended December 31, 2025, $ 297.4 million of which was recognized as of June 30, 2025 and $ 363.3 million of which was recognized as of October 31, 2025. Impairment charges related to our goodwill are recorded in Impairment charges in the Consolidated Statements of Operations. 82 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table summarizes the changes in the carrying amount of goodwill during the years ended December 31, 2025 and 2024 (in thousands): Gross goodwill balance at January 1, 2024 $ 1,324,459 Accumulated impairment charges ( 377,100 ) Goodwill – net balance at January 1, 2024 947,359 Vegas.com Acquisition (Note 3) 536 Foreign currency translation adjustment ( 4,776 ) Goodwill – net balance at December 31, 2024 943,119 Foreign currency translation adjustment 1,467 Impairment charges ( 660,671 ) Goodwill – net balance at December 31, 2025 $ 283,915 At December 31, 2025 and 2024 , accumulated impairment charges related to our goodwill were $ 1,037.8 million and $ 377.1 million, respectively. 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, 2025 and 2024 (in thousands): December 31, Weighted Average 2025 Remaining Life Definite-lived intangible assets Supplier relationships $ 57,123 2.1 Customer relationships 34,620 1.0 Acquired developed technology 29,290 1.7 Capitalized development costs 63,835 2.1 Capitalized development costs – work in progress 5,931 Acquired Domain Name 17,348 14.5 Seat images 1,266 3.0 Foreign currency translation adjustment ( 1,936 ) Total gross book value 207,477 Less: accumulated amortization Supplier relationships ( 29,266 ) Customer relationships ( 24,603 ) Acquired developed technology ( 18,109 ) Capitalized development costs ( 41,098 ) Acquired Domain Name ( 1,292 ) Seat images ( 267 ) Foreign currency translation adjustment 620 Total accumulated amortization ( 114,015 ) Indefinite-lived intangible assets Trademarks 110,538 Foreign currency translation adjustment ( 120 ) Accumulated impairment charges ( 62,352 ) Intangible assets – net $ 141,528 83 VIVID SEATS INC. NOTES to the Consolidated Financial Statements December 31, Weighted Average 2024 Remaining Life Definite-lived intangible assets Supplier relationships $ 57,123 3.1 Customer relationships 34,620 2.0 Acquired developed technology 29,240 2.6 Capitalized development costs 46,293 1.6 Capitalized development costs – work in progress 6,839 Acquired Domain Name 17,348 15.4 Seat images 347 3.0 Acquired Domain Name ( 1,891 ) Total gross book value 189,919 Less: accumulated amortization Supplier relationships ( 16,048 ) Customer relationships ( 14,053 ) Acquired developed technology ( 10,025 ) Capitalized development costs ( 27,325 ) Acquired Domain Name ( 88 ) Seat images ( 26 ) Acquired Domain Name 357 Total accumulated amortization ( 67,208 ) Indefinite-lived intangible assets Trademarks 110,538 Acquired Domain Name ( 133 ) Less: accumulated amortization — Intangible assets – net $ 233,116 Definite-Lived Intangible Assets Definite-lived intangible assets, which primarily derive from acquisitions and internal strategic investments, are recorded net of accumulated amortization and foreign currency translation adjustments. 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 purchase price of the Acquired Domain Name was $ 17.3 million, which will be amortized over a total period of 15.6 years (the “ Acquired Domain Name Term ” ). As of December 31, 2025 and 2024, the Acquired Domain Name had a carrying value of $ 16.1 million and $ 17.3 million, respectively, 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 interest will accrue over the Acquired Domain Name Term at an effective interest rate of 8.6 % per annum. As of December 31, 2025 and 2024, the Acquired Domain Name Obligation had a carrying value of $ 16.6 million and $ 17.2 million, respectively, of which $ 0.6 million is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets and the remainder is recorded in Other liabilities in the Consolidated Balance Sheets. During the years ended December 31, 2025 and 2024 , we recognized an expense of $ 1.4 million and $ 0.2 million, respectively, for interest incurred in relation to the Acquired Domain Name Obligation, which is recorded in Interest expense – net in the Consolidated Statements of Operations. 84 VIVID SEATS INC. NOTES to the Consolidated Financial Statements During the years ended December 31, 2025, 2024, and 2023, we recognized an expense o f $ 46.8 milli on, $ 42.4 million, and $ 15.7 million, respectively, for amortization related to our definite-lived intangible assets. Amortization expenses related to our definite-lived intangible assets are recorded in Depreciation and amortization expenses in the Consolidated Statements of Operations. During the years ended December 31, 2025, 2024, and 2023, we recognized a loss o f $ 0.4 million, $ 0.2 million, and $ 0.6 million, respectively, for asset disposals related to our definite-lived intangible assets. Losses on asset disposals are recorded in General and administrative expenses in the Consolidated Statements of Operations. The following table presents the estimated future amortization expense related to our definite-lived intangible assets (other than work in progress capitalized development costs) at December 31, 2025 (in thousands): Definite-Lived Intangible Assets 2026 $ 42,241 2027 26,345 2028 6,211 2029 1,107 2030 1,107 Thereafter 10,520 Estimated future amortization expense $ 87,531 Indefinite-Lived Intangible Assets Similar to goodwill, our indefinite-lived intangible assets are not subject to amortization and are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. At June 30, 2025, we performed a qualitative impairment assessment to determine if it was more likely than not that the fair value of certain indefinite-lived trademarks was less than their carrying value by evaluating relevant events and circumstances. After considering recent declines in our financial performance and near-term outlook, among other factors, we concluded that it was no longer more likely than not that the fair value of certain indefinite-lived trademarks exceeded their carrying value as of June 30, 2025. As a result, we concluded that a triggering event had occurred and we performed a quantitative impairment test. As part of our annual impairment testing, we again performed a qualitative assessment of our indefinite-lived intangible assets at October 31, 2025 to determine if it was more likely than not that the fair value of certain indefinite-lived trademarks was less than their carrying value by evaluating relevant events and circumstances. After considering recent declines in our financial performance and near-term outlook, among other factors, we concluded that it was no longer more likely than not that the fair value of certain indefinite-lived trademarks exceeded their carrying value as of October 31, 2025. As a result, we performed a quantitative impairment test. The fair value of certain indefinite-lived trademarks in the quantitative impairment tests performed as of June 30, 2025 and October 31, 2025 was determined using the relief-from-royalty method, a detailed valuation methodology that involves the application of reasonable royalty rates to a net sales stream using the discounted cash flow method. Based on our impairment analysis, we determined that the estimated fair value of certain indefinite-lived trademarks was lower than their carrying value as of both June 30, 2025 and October 31, 2025, indicating that certain indefinite-lived trademarks had been impaired. Consequently, we recognized a non-cash impairment expense of $ 62.3 million related to certain indefinite-lived trademarks during the year ended December 31, 2025, $ 23.0 million of which was recognized as of June 30, 2025 and $ 39.3 million of which was recognized as of October 31, 2025. Impairment charges related to our indefinite-lived intangible assets are recorded in Impairment charges in the Consolidated Statements of Operations. At December 31, 2025 and 2024, accumulated impairment charges related to our indefinite-lived intangible assets were $ 141.0 million and $ 78.7 million, respectively. 85 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 11. Investments and Fair Value Measurements Investments 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 ”). Interest on the Note accrues at 8.0 % per annum, and outstanding principal and accrued interest on the Note is due and payable at the earlier of July 3, 2030 or a change in control of the company. The Warrant is exercisable until the date that is three years after the Note is repaid, subject to certain accelerating events. We account for the Note in accordance with ASC Topic 320, Investments – Debt and Equity Securities , pursuant to which the Note is classified as an available-for-sale security and recognized at fair value. During the years ended December 31, 2025, 2024, and 2023, the Note had an unrealized loss of $ 0.1 million, an unrealized gain of $ 0.1 million, and an unrealized gain of $ 0.2 million, respectively. U nrealized gains and losses related to differences between the fair value of the Note and the carrying value of the Note are recorded as a separate component of Other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income (Loss) on a recurring basis until realized. The Note’s amortized cost was $ 4.0 million and $ 3.0 million at December 31, 2025 and 2024, respectively. We did not recognize any credit losses related to the Note during the years ended December 31, 2025, 2024, and 2023. We account for the Warrant in accordance with ASC 815, pursuant to which the Warrant is classified as a derivative instrument and recognized at fair value. During the years ended December 31, 2025 and 2024, the fair value of the Warrant decreased by $ 2.2 million and $ 0.8 million, respectively, for which we recognized a loss in both periods. During the year ended December 31, 2023, the fair value of the Warrant increased by $ 0.5 million, for which we recognized a gain in the period. Unrealized gains and losses related to changes in the fair value of the Warrant are recorded in Other income – net in the Consolidated Statements of Operations on a recurring basis until realized. The presentation of the Warrant, including whether it should be classified as an asset or a liability, is evaluated at the end of each reporting period. Fair Value Measurements We measure certain financial assets (i.e., investments) and non-financial assets (i.e., goodwill, intangible assets, and long-lived assets) 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. Recurring Fair Value Measurements The following tables present the recurring fair value measurements of our financial assets by hierarchy level at December 31, 2025 and 2024 (in thousands): Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2025 Note $ — $ — $ 4,241 $ 4,241 Warrant — — 1,124 1,124 $ — $ — $ 5,365 $ 5,365 Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2024 Note $ — $ — $ 3,604 $ 3,604 Warrant — — 3,325 3,325 $ — $ — $ 6,929 $ 6,929 The fair value of the Note is determined using the income approach, which consists entirely of Level 3 inputs. 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 86 VIVID SEATS INC. NOTES to the Consolidated Financial Statements expected volatility, the risk-free rate of interest, and the expected dividend yield. Because of the inherent uncertainty of these valuations, the estimated fair values of the Note and the Warrant may differ significantly from the fair values that would have been used had a ready market for the investments existed, the effects of which could be material. The following table presents quantitative information about the significant unobservable inputs applied to the recurring Level 3 fair value measurements of our financial assets at December 31, 2025 and 2024: December 31, December 31, Asset Significant Unobservable Inputs 2025 2024 Note Expected term (years) 4.5 5.5 Implied yield 21.7 % 21.0 % Warrant Expected term (years) 4.5 5.5 Expected volatility 62.0 % 59.0 % Risk-free rate 3.7 % 4.4 % Expected dividend yield 0.0 % 0.0 % The following table summarizes the changes in the carrying amounts 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, 2025 and 2024 (in thousands): Note Warrant Balances at January 1, 2024 $ 2,868 $ 4,125 Accretion of discount 116 — Interest paid-in-kind 501 — Unrealized gains (losses): Recorded in Net income (loss) — ( 800 ) Recorded in Other comprehensive income (loss) 119 — Total unrealized gains (losses) 119 ( 800 ) Balances at December 31, 2024 3,604 3,325 Accretion of discount 218 — Interest paid-in-kind 539 — Unrealized losses: Recorded in Net income (loss) — ( 2,201 ) Recorded in Other comprehensive income (loss) ( 120 ) — Total unrealized losses ( 120 ) ( 2,201 ) Balances at December 31, 2025 $ 4,241 $ 1,124 Nonrecurring Fair Value Measurements The following table presents quantitative information about the significant unobservable inputs applied to the nonrecurring Level 3 fair value measurements of our non-financial assets as of October 31, 2025, which was the latest annual quantitative impairment test date of the following non-financial assets: Asset Significant Unobservable Inputs Range (Weighted Average) Goodwill Discount rate 15.6 % Long-term growth rate 3.0 % Trademarks Discount rate 13.9 % - 17.2 % ( 15.2 %) Long-term growth rate 3.0 % - 3.0 % ( 3.0 %) Royalty rate 1.0 % - 4.0 % ( 2.2 %) 87 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table presents the sensitivities to changes in the significant unobservable inputs as of October 31, 2025, which was the latest annual quantitative impairment test date of the following non-financial assets (in thousands): Goodwill Trademarks 50 basis point increase in discount rate $ ( 4,507 ) $ ( 957 ) 50 basis point decrease in long-term growth rate ( 1,653 ) ( 443 ) 50 basis point decrease in royalty rate — ( 14,156 ) See Note 2, Summary of Significant Accounting Policies , and Note 10, Goodwill – Net and Intangible Assets – Net , for more information regarding the fair value methodologies of our non-financial assets. 12. Accrued Expenses and Other Current Liabilities The following table presents the major components of accrued expenses and other current liabilities at December 31, 2025 and 2024 (in thousands): December 31, December 31, 2025 2024 Accrued marketing expense $ 21,159 $ 30,573 Accrued customer credits 52,321 55,785 Accrued future customer compensation 15,771 26,614 Accrued payroll 10,463 10,128 Accrued operating expenses 11,800 16,193 Other current liabilities 14,443 25,754 Accrued expenses and other current liabilities $ 125,957 $ 165,047 Accrued customer credits represent credits issued and outstanding for event cancellations or other service issues related to previously recorded sales transactions. The accrued amount is reduced by the amount of credits estimated to go unused, or breakage, provided that the credits are not subject to escheatment. We estimate breakage based on historical usage trends and available data on comparable programs, and we recognize breakage in proportion to the pattern of redemption for customer credits. Our breakage estimates could be impacted by future activity that differs from our estimates, the effects of which could be material. During the years ended December 31, 2025, 2024, and 2023, $ 13.7 million, $ 18.5 million, and $ 15.1 million of accrued customer credits were redeemed, respectively, and we recognized revenue from breakage of $ 4.4 million, $ 12.2 million, and $ 20.6 million, respectively. Breakage amounts are recorded net of reductions in associated accounts receivable balances. Accrued future customer compensation represents an estimate of the amount of customer compensation due from future event cancellation charges. These provisions, which are based on historic experience, revenue volumes for future events, and our estimate of the likelihood of future event cancellations, are recognized as a component of Revenues in the Consolidated Statements of Operations. The expected recoveries of these obligations are recorded in Prepaid expenses and other current assets in the Consolidated Balance Sheets. Our estimated accrual could be impacted by future activity that differs from our estimates, the effects of which could be material. During the years ended December 31, 2025, 2024, and 2023, we recognized a net decrease in revenue of $ 0.2 million, a net increase in revenue of $ 1.1 million, and a net increase in revenue of $ 0.1 million, respectively, from reversals of previously recorded revenue and changes to accrued future customer compensation related to event cancellations where our performance obligations were satisfied in prior periods. Accrued future customer compensation decreased by $ 10.8 million between December 31, 2024 and 2025, primarily due to a decrease in estimated future event cancellations. A re lated provision for the expected recovery of compensation from customers is recorded in Prepaid expenses and other current assets in the Consolidated Balance Sheets. 88 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 13. Long-Term Debt – Net The following table presents the major components of long-term debt, net of unamortized debt issuance costs and current maturities, at December 31, 2025 and 2024 (in thousands): December 31, December 31, 2025 2024 2024 First Lien Loan $ — $ 393,025 2025 First Lien Loan 390,077 — Outstanding debt 390,077 393,025 Less: unamortized debt issuance costs ( 2,716 ) ( 4,115 ) Long-term debt 387,361 388,910 Less: current maturities of long-term debt ( 3,930 ) ( 3,950 ) Long-term debt – net $ 383,431 $ 384,960 2022 First Lien Loan & Revolving Facility In 2022, we refinanced the outstanding balance of our former first lien debt facility with a $ 275.0 million term loan (the “ 2022 First Lien Loan ”) and a $ 100.0 million revolving credit facility with a maturity date of February 3, 2027 (the “ Revolving Facility ”). As of December 31, 2025 , availability under the Revolving Facility was reduced by $ 5.0 million due to outstanding letters of credit. 2024 First Lien Loan On June 14, 2024, we refinanced the outstanding balance of the 2022 First Lien Loan with a $ 395.0 million term loan (the “ 2024 First Lien Loan ”). The Revolving Facility was not impacted by the refinancing. The 2024 First Lien Loan carried an interest rate equal to the secured overnight financing rate (“ SOFR ”) (subject to a 0.5 % floor) plus a margin of 3.00 % . The effective interest rate on the 2024 First Lien Loan was 7.9 % per annum at December 31, 2024. Other than with respect to the interest rate, the 2024 First Lien Loan had the same material terms (including with respect to maturity, prepayment, security, covenants, and events of default) as the 2025 First Lien Loan (as defined in the “2025 First Lien Loan” section below). At December 31, 2024, the fair value of the 2024 First Lien Loan approximated its carrying value. 2025 First Lien Loan On February 5, 2025, we refinanced the outstanding balance of the 2024 First Lien Loan with a $ 393.0 million term loan with a maturity date of February 3, 2029 (the “ 2025 First Lien Loan ”). The Revolving Facility was not impacted by the refinancing. The terms of the 2025 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 borrowings under the Revolving Facility exceed certain levels. All obligations under the 2025 First Lien Loan are unconditionally guaranteed by Hoya Intermediate and, subject to certain exceptions provided for therein, substantially all of Hoya Intermediate’s direct and indirect wholly owned domestic subsidiaries (collectively, the “ Guarantors ”). The 2025 First Lien Loan requires quarterly principal payments of $ 1.0 million. All obligations under the 2025 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 2025 First Lien Loan carries an interest rate equal 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 effective interest rate on the 2025 First Lien Loan was 6.3 % at December 31, 2025. The 2025 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. At December 31, 2025, the estimated fair value and carrying value of the 2025 First Lien Loan were $ 220.4 million and $ 387.4 million, respectively. If measured at 89 VIVID SEATS INC. NOTES to the Consolidated Financial Statements fair value, the 2025 First Lien Loan would be classified as Level 2 within the fair value hierarchy because its fair value would be estimated using quoted market prices that are directly observable in the marketplace. See Note 2, Summary of Significant Accounting Policies , and Note 11, Investments and Fair Value Measurements , for more information regarding our approach and accounting treatment of recurring and nonrecurring fair value measurements. We are subject to certain reporting and compliance-related covenants to remain in good standing under the 2025 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 a failure to remedy any such non-compliance could result in the acceleration of the loans or foreclosure on the collateral. As of December 31, 2025 and 2024 , we were in compliance with all debt covenants related to the 2025 First Lien Loan and the 2024 First Lien Loan, respectively, and had no outstanding borrowings under the Revolving Facility. In accordance with ASC Topic 470, Debt , we analyzed our outstanding balances with each lender both immediately before and immediately after refinancing the 2024 First Lien Loan with the 2025 First Lien Loan and determined that the refinancing is partly accounted for as a debt modification (the “ First Lien Loan Modification ”), partly accounted for as a debt extinguishment (the “ First Lien Loan Extinguishment ”), and partly accounted for as an issuance of new debt (the “ First Lien Loan Issuance ”). During the year ended December 31, 2025 , we (i) recognized an expense of $ 0.6 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; (ii) recognized an expense of $ 0.8 million for losses incurred in relation to the First Lien Loan Extinguishment, which is recorded in Loss on extinguishment of debt in the Consolidated Statements of Operations; and (iii) capitalized $ 0.2 million of third-party fees incurred in relation to the First Lien Loan Issuance, which is recorded in Long-term debt – net in the Consolidated Balance Sheets. 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 1.3 % per annum. On April 4, 2024, we paid off the Shoko Chukin Bank Loan balance in its entirety. Future Maturities of Outstanding Debt The following table presents the future maturities of our outstanding debt, which entirely consists of the 2025 First Lien Loan, at December 31, 2025 (in thousands): 2025 First Lien Loan 2026 $ 3,930 2027 3,930 2028 3,930 2029 378,287 Future maturities of outstanding debt $ 390,077 14. 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 plan also provides for discretionary profit-sharing contributions and matching contributions. During the years ended December 31, 2025, 2024, and 2023, we provided matching contributions of $ 2.1 million, $ 2.2 million, and $ 1.6 million, respectively, which is recorded in General and administrative expenses in the Consolidated Statements of Operations. We did no t provide any discretionary profit-sharing contributions during the years ended December 31, 2025, 2024, and 2023 . 90 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 15. Financial Instruments In connection with the Reverse Stock Split, proportionate equitable adjustments were made to the number of shares issuable upon exercise of the Public Warrants, Private Warrants, Exercise Warrants, Mirror Warrants, and Intermediate Warrants (each as defined below), as well as to the exercise and redemption prices thereof, as applicable. All share, per share, unit, and per unit amounts set forth below reflect these adjustments. See Note 1, Background and Basis of Presentation , for more information. Public Warrants We issued certain warrants that entitle the holders thereof (including Horizon Sponsor) to purchase shares of Class A common stock at an exercise price of $ 230.00 per share (the “ Public Warrants ”) . The Public Warrants are traded on the Nasdaq Global Select Market under the symbol “SEATW.” 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 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 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 our Class A common stock exceeds $ 360.00 per share. There is an effective registration statement and prospectus relating to the shares issuable upon exercise of the Public Warrants. Under certain circumstances, we may elect to redeem the Public Warrants at a redemption price of $ 0.20 per Public Warrant at any time during the term of the Public Warrants in which the trading price of our Class A common stock has been at least $ 360.00 per share for 20 trading days within a 30 trading-day period. If we elect to redeem the Public Warrants, we must notify the Public Warrant holders in advance, who would then have at least 30 days from the date of such notification to exercise their respective Public Warrants. Any Public Warrants not exercised within that 30-day period will be redeemed pursuant to this provision. As of December 31, 2025 and 2024 , there were Public Warrants to purchase 338,342 shares of Class A common stock outstanding. Private Warrants We issued certain warrants that entitle Horizon Sponsor to purchase shares of Class A common stock at an exercise price of $ 230.00 per share (the “ Private Warrants ”). The Private Warrants have similar terms to the Public Warrants, but are not redeemable by us. As of December 31, 2025 and 2024 , there were Private Warrants to purchase 325,989 shares of Class A common stock outstanding. Exercise Warrants We issued certain warrants that entitle Horizon Sponsor to purchase shares of Class A common stock at exercise prices of $ 200.00 and $ 300.00 per share (the “ Exercise Warrants ”). The Exercise Warrants have similar terms to the Public Warrants, but have different exercise prices, an initial term of 10 years , are not redeemable by us, and are fully transferable. As of December 31, 2025 and 2024 , there were Exercise Warrants to purchase 1,700,000 shares of Class A common stock outstanding ( 850,000 at an exercise price of $ 200.00 per share and 850,000 at an exercise price of $ 300.00 per share). Mirror Warrants Hoya Intermediate issued certain warrants that entitled us to purchase Intermediate Units at exercise prices of $ 200.00 , $ 300.00 , and $ 230.00 per unit (the “ Mirror Warrants ”). The Mirror Warrants had nearly identical terms to 91 VIVID SEATS INC. NOTES to the Consolidated Financial Statements the Public Warrants, Private Warrants, and Exercise Warrants. If a Public Warrant, Private Warrant, or Exercise Warrant were exercised or tendered, an equivalent number of Mirror Warrants would be exercised or tendered. As of December 31, 2024 , there were Mirror Warrants to purchase 2,364,331 Intermediate Units outstanding ( 850,000 at an exercise price of $ 200.00 per unit, 850,000 at an exercise price of $ 300.00 per unit, and 664,331 at an exercise price of $ 230.00 per unit). On October 31, 2025, the Mirror Warrants were terminated in connection with the Corporate Simplification. As a result, as of December 31, 2025, there were zero Mirror Warrants outstanding. See Note 1, Background and Basis of Presentation , for more information. Intermediate Warrants In connection with the Merger Transaction, Hoya Intermediate issued certain warrants that entitled Hoya Topco to purchase Intermediate Units at exercise prices of $ 200.00 and $ 300.00 per unit (the “ Intermediate Warrants ”). Because the Intermediate Warrants allowed for cash redemption at the discretion of the holder, they met the criteria to be classified as liability instruments and were 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 $ 18.8 million, for which we recorded a warrant liability. As of December 31, 2024, there were Intermediate Warrants to purchase 200,000 Intermediate Units outstanding ( 100,000 at an exercise price of $ 200.00 per share and 100,000 at an exercise price of $ 300.00 per share). On October 31, 2025, the Intermediate Warrants were replaced by the Amended Intermediate Warrants (as defined in the “Amended Intermediate Warrants” section below) in connection with the Corporate Simplification. As a result, as of December 31, 2025, there were zero Intermediate Warrants outstanding. See Note 1, Background and Basis of Presentation , for more information. Option Contingent Intermediate Warrants A portion of the Intermediate Warrants that were issued in connection with the Merger Transaction entitled Hoya Topco to purchase 50,000 Intermediate Units at an exercise price of $ 200.00 per unit and 50,000 Intermediate Units at an exercise price of $ 300.00 per unit (the “ Option Contingent Intermediate Warrants ”). The Option Contingent Intermediate Warrants were issued in tandem with stock options that we issued to members of our management team (the “ Management Options ”) and were exercisable only if a Management Option were forfeited or expired unexercised. Upon consummation of the Merger Transaction, the fair value of the Option Contingent Intermediate Warrants was determined using the Black-Scholes model and estimated at $ 1.6 million, for which we recorded a warrant liability. The estimated fair value of the Option Contingent Intermediate Warrants was adjusted to reflect the probability of forfeiture of the Management Options based on historical forfeiture rates for Hoya Topco profits interests. On December 7, 2023, Hoya Topco voluntarily terminated the Option Contingent Intermediate Warrants. Immediately before such termination, the fair value of the liability related to the Option Contingent Intermediate Warrants was determined using the Black-Scholes model and estimated at $ 1.1 million. Upon such termination, this liability was reduced to zero, with an equivalent increase recorded in Redeemable noncontrolling interests in the Consolidated Balance Sheets. As a result, as of December 31, 2025 and 2024, there were zero Option Contingent Intermediate Warrants outstanding. Amended Intermediate Warrants In connection with the Corporate Simplification, the Intermediate Warrants were amended to, in lieu of providing for the right to purchase Intermediate Units and allowing for cash redemption at the discretion of the holder, instead provide for the right to purchase equal numbers of shares of Class A common stock at equal exercise prices and not allow for cash redemption (as amended, the “ Amended Intermediate Warrants ”). As a result, the Amended Intermediate Warrants now have substantially similar terms to the Private Warrants. 92 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Because the Amended Intermediate Warrants no longer allow for cash redemption at the discretion of the holder, they meet the criteria to be classified as equity instruments and, accordingly, were reclassified from Other liabilities to Additional paid-in capital in the Consolidated Balance Sheets as of December 31, 2025. Immediately before the reclassification, the fair value of the Intermediate Warrants was $ 0.3 million. As of December 31, 2025 , there were Amended Intermediate Warrants to purchase 200,000 shares of Class A common stock outstanding ( 100,000 at an exercise price of $ 200.00 per share and 100,000 at an exercise price of $ 300.00 per share). Fair Value Measurements The following table presents quantitative information about the significant unobservable assumptions applied to the final fair value measurement of the Intermediate Warrants as of October 31, 2025 (the date on which the Intermediate Warrants were reclassified from liability instruments to equity instruments) and the recurring fair value measurement of the Intermediate Warrants as of December 31, 2024: October 31, December 31, Significant Unobservable Inputs 2025 2024 Expected term (years) 6.0 6.8 Expected volatility 71.0 % 52.0 % Risk-free rate 3.8 % 4.5 % Expected dividend yield 0.0 % 0.0 % During the years ended December 31, 2025, 2024, and 2023, the fair value of the Intermediate Warrants decreased by $ 5.9 million, $ 4.0 million, and $ 1.0 million, respectively, for which we recognized a gain in all periods. Gains related to changes in the fair value of the Intermediate Warrants are recorded in Other income – net in the Consolidated Statements of Operations. 16. Redeemable noncontrolling Interests Prior to the Corporate Simplification, Hoya Topco held 100 % of our Class B common stock and 36.9 % of the Intermediate Units, which represented a redeemable noncontrolling interest in VSI. At its discretion, Hoya Topco had the right to exchange its Intermediate Units for shares of Class A common stock on a one-to-one basis or for cash proceeds of equal value at the time of redemption. For periods through the consummation of the Corporate Simplification, 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. In connection with the Corporate Simplification, all of the Intermediate Units previously held by Hoya Topco (and corresponding shares of Class B common stock) were exchanged for an equal number of shares of Class A common stock. As a result, our redeemable noncontrolling interests were extinguished, Hoya Intermediate is now a wholly owned subsidiary of VSI, and the net income (loss) attributable to Hoya Topco’s redeemable noncontrolling interests for the year ended December 31, 2025 only pertains to the period from January 1, 2025 through October 31, 2025. See Note 1, Background and Basis of Presentation for more information. 17. Equity Corporate Simplification Prior to the Corporate Simplification, VSI held a 63.1 % interest in Hoya Intermediate, and Hoya Topco held the remainder. Hoya Topco’s interest in Hoya Intermediate represented a redeemable noncontrolling interest. At its discretion, Hoya Topco had the right to exchange its Intermediate Units for shares of Class A common stock on a one-to-one basis or for cash proceeds of equal value at the time of redemption. See Note 16, Redeemable Noncontrolling Interests , for additional detail on Hoya Topco’s former right to exchange its Intermediate Units. As the redeemable noncontrolling interests were redeemable upon the occurrence of an event not solely within our control, we classified them as temporary equity. Our redeemable noncontrolling interests were initially measured 93 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 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 (which were based on the fair value of our Class A common stock) were recorded as a deemed dividend each reporting period, which reduced Retained earnings, if any, or Additional paid-in capital in the Consolidated Balance Sheets. In connection with the Corporate Simplification, all of the Intermediate Units previously held by Hoya Topco (and corresponding shares of Class B common stock) were exchanged for an equal number of shares of Class A common stock. As a result, our redeemable noncontrolling interests were extinguished and Hoya Intermediate is now a wholly owned subsidiary of VSI. See Note 1, Background and Basis of Presentation for more information. Share Repurchase Program On February 29, 2024, our Board authorized a share repurchase program for up to $ 100.0 million of Class A common stock (the “ Share Repurchase Program ”). The Share Repurchase Program was publicly announced on March 5, 2024, does not have a fixed expiration date, and does not obligate us to purchase any minimum number of shares. During the years ended December 31, 2025 and 2024, we repurchased 0.4 million and 0.2 million shares of Class A common stock, respectively, under the Share Repurchase Program, for which we paid $ 18.1 million and $ 22.8 million, respectively, and incurred commissions and excise taxes of $ 0.3 million and $ 0.1 million, respectively. As of December 31, 2025, we recognized a liability of $ 0.1 million for unpaid excise taxes related to repurchases of Class A common stock, which is recorded in Accrued expenses and other current liabilities in the Consolidated Balanced Sheets. Cumulatively as of December 31, 2025, we have repurchased 0.6 million shares of Class A common stock under the Share Repurchase Program, for which we have paid $ 40.9 million and incurred commissions and excise taxes of $ 0.4 million. As of December 31, 2025, $ 59.1 million remained available for future repurchases under the 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. 2023 Secondary Offerings In 2023, Hoya Topco, as selling stockholder, completed the following public offerings of shares of Class A common stock: • On May 22, 2023, it sold 0.8 million shares, and on June 15, 2023, it sold 0.1 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 $ 153.60 per share and sold at a public offering price of $ 160.00 per share. Hoya Topco exchanged 0.9 million shares of Class B common stock and 0.9 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 1.2 million shares, which included 0.2 million shares sold pursuant to the full exercise of the underwriters ’ option to purchase additional shares and 0.1 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 $ 124.80 per share and, other than the 0.1 million shares that we repurchased, sold at a public offering price of $ 130.00 per share. Hoya Topco exchanged 1.2 million shares of Class B common stock and 1.2 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 an expense of $ 2.2 million for fees incurred in relation to the 2023 Secondary Offerings, which is recorded in General and administrative expenses in the Consolidated Statements of Operations. 94 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in each major component of Accumulated other comprehensive income (loss) attributable to Class A common stockholders during the years ended December 31, 2025 and 2024 (in thousands): Accumulated Unrealized Gain on Note Accumulated Foreign Currency Translation Adjustment Accumulated Other Comprehensive Income (Loss) Balances at January 1, 2024 $ 106 $ 641 $ 747 Recorded in Other comprehensive income (loss) 75 ( 1,702 ) ( 1,627 ) Balances at December 31, 2024 181 ( 1,061 ) ( 880 ) Recorded in Other comprehensive income (loss) ( 106 ) 1,006 900 Mergers and exchange of Class B common stock for Class A common stock in connection with Corporate Simplification 120 33 153 Balances at December 31, 2025 $ 195 $ ( 22 ) $ 173 18. 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 price. Our purchase obligations are $ 8.9 million payable in the next 12 months and $ 12.7 million payable thereafter. Litigation 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 were 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 2020. In 2022, certain class members were issued coupons and other class members were notified that they were eligible to submit a claim for a coupon. As of December 31, 2025 and 2024, 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 were a defendant in a class action lawsuit regarding customer compensation for cancellations related to COVID-19 restrictions. A final order approving the settlement of this 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, 2025 and 2024 related to this matter. We were a defendant in a lawsuit related to an alleged violation of the Illinois Biometric Information Privacy Act. A final order approving the settlement of this lawsuit was entered by the court on January 29, 2025 , pursuant to which $ 0.3 million was paid to cover approved claims and legal and administrative fees. This amount, which was covered in full by insurance, was paid on March 28, 2025. As of December 31, 2025, we had no accrued liability related to this matter. As of December 31, 2024, a liability of $ 0.3 million was recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets 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. 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. 95 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 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 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 all 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, 2025 and 2024, we recognized a liability of $ 3.4 million and $ 7.5 million, respectively, related to uncollected indirect taxes (including sales taxes). This uncollected indirect tax liability, which is recorded in Accrued expenses and other current liabilities in the Consolidated Balance Sheets, increases when accruals are made in jurisdictions where we believed it was probable we should remit payment to U.S. and foreign governmental tax authorities before all required amounts are collected from the customer and decreases when we receive abatements and/or recognize other reductions to the balance. During the years ended December 31, 2025, 2024, and 2023 we recognized a net benefit of $ 0.8 million, a net expense of $ 5.8 million, and a net expense of $ 3.2 million, respectively, related to the liability for uncollected indirect taxes (including sales taxes). The net expense/benefit related to the liability for uncollected indirect taxes (including sales taxes) 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 providing 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 . On August 26, 2024, we disbursed $ 2.0 million of the Sponsorship Loan. While there is no stated maturity date for the Sponsorship Loan, we are entitled to a portion of advertising revenue received by the counterparty until it is repaid in full. On June 30, 2025, we recorded a full write-off on the outstanding balance of the Sponsorship Loan as a result of the counterparty filing for bankruptcy. The Sponsorship Loan’s carrying amount was written down to zero, reflecting the expectation of no recoverable amount under ASC Topic 326, Measurement of Credit Losses on Financial Instruments . During the year ended December 31, 2025, we recognized a loss of $ 2.0 million in connection to the write-off of the Sponsorship Loan, which is recorded in Other income – net in the Consolidated Statements of Operations. 19. Related –Party Transactions Viral Nation 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 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 and $ 1.7 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 for Viral Nation’s services during the year ended December 31, 2025. 96 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 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 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 during the year ended December 31, 2023. We did no t recognize an expense in relation to the strategic partnership with Rolling Stone during the years ended December 31, 2025 and 2024. Los Angeles Dodgers The Los Angeles Dodgers are a Major League Baseball 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 Op erations. We did no t recognize an expense in relation to the strategic partnership with the Los Angeles Dodgers during the year ended December 31, 2025. Mabl Mabl, Inc. (“ Mabl ”) is a software company that uses its proprietary AI-powered platform to provide automation support and other similar technology services. Martin Taylor, a former member of our Board, is a Senior Managing Director at Vista Equity Partners, which is an investor in Mabl. For Mabl's services, we recognized an expense of $ 0.2 million, less than $ 0.1 million , and zero during the years ended December 31, 2025, 2024, and 2023, respectively, which is recorded in General and administrative expenses in the Consolidated Statements of Operations. TRA In connection with the Merger Transaction, we entered into the TRA with the existing Hoya Intermediate unitholders. See “TRA” in Note 20, Income Taxes , for more information. In connection with the Corporate Simplification, all rights and obligations under the TRA were terminated (other than certain terms thereof that expressly survived), including $ 5.8 million of cash payments that would have otherwise been due in the first quarter of 2026, in exchange for the issuance of 403,022 shares of Class A common stock. See Note 1, Background and Basis of Presentation and “TRA” in Note 20, Income Taxes for more information. Share Repurchase On December 12, 2023, we repurchased 0.1 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, at a price of $ 124.80 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. 20. Income Taxes VSI is subject to U.S. federal and state income taxes with respect to our allocable share of any taxable income (loss) of Hoya Intermediate, other subsidiaries of VSI, and any standalone income (loss) we generate. Hoya Intermediate is organized as a limited liability company, whereas the 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, Japan, Luxembourg, and the United Kingdom. For periods prior to the Corporate Simplification, Hoya Intermediate was treated as a partnership for federal and state income tax purposes and was generally not subject to entity level income taxes. During those periods, Hoya Intermediate’s taxable income (loss) was passed through to its members, including VSI and Hoya Topco, each of whom were responsible for their own U.S. federal and state income taxes. Following the Corporate Simplification, Hoya Intermediate continued to be treated as a partnership, with VSI now indirectly holding all of its units. See Note 1, Background and Basis of Presentation , for more information. During the three months and year ended December 31, 2025, VSI also completed an internal legal entity restructuring to further simplify its organizational structure and align its U.S. operations within a single U.S. 97 VIVID SEATS INC. NOTES to the Consolidated Financial Statements consolidated tax group. The restructuring included a series of stock and partnership interest contributions leading to the conversion of Hoya Intermediate from a partnership to a disregarded entity for U.S. federal and state income tax purposes, with VSI continuing to hold all of its units. As a result, we now account for our deferred taxes related to the operations of Hoya Intermediate based on the financial accounting to income tax basis differences of the assets and liabilities held by Hoya Intermediate, where prior to the Corporate Simplification and the legal entity restructuring, we accounted for our deferred taxes related to the operations of Hoya Intermediate based on the financial accounting to income tax basis differences of our investment in Hoya Intermediate. The following table presents the major components of income (loss) before income taxes and income tax expense (benefit) during the years ended December 31, 2025, 2024, and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 United States $ ( 603,367 ) $ 22,838 $ 68,166 Foreign ( 48,738 ) ( 119 ) 2,776 Income (loss) before income taxes $ ( 652,105 ) $ 22,719 $ 70,942 Years Ended December 31, 2025 2024 2023 U.S. federal income tax expense (benefit) $ ( 6,816 ) $ 3,048 $ 1,084 State and local income tax expense 423 256 326 Foreign federal income tax expense 1,333 3,867 1,250 Current income tax expense (benefit) ( 5,060 ) 7,171 2,660 U.S. federal income tax expense (benefit) 66,543 2,650 ( 38,915 ) State and local income tax expense (benefit) 10,084 2,696 ( 5,572 ) Foreign federal income tax benefit ( 2,182 ) ( 4,100 ) ( 372 ) Deferred income tax expense (benefit) 74,445 1,246 ( 44,859 ) Income tax expense (benefit) $ 69,385 $ 8,417 $ ( 42,199 ) We adopted ASU 2023-09 on a prospective basis beginning with the year ended December 31, 2025. The following table presents the required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory income tax expense and rate to our actual global effective income tax expense and rate for the year ended December 31, 2025 (in thousands, except percentages): Amount Percent U.S. federal statutory income tax rate $ ( 136,942 ) 21.0 % State and local income taxes, net of federal (1) 8,394 ( 1.3 )% Foreign tax effects 9,352 ( 1.4 )% Effect of cross-border tax laws 86 ( 0.0 )% Tax credits ( 628 ) 0.1 % Change in valuation allowance 139,437 ( 21.4 )% Nontaxable or nondeductible items: Redeemable noncontrolling interests 49,195 ( 7.5 )% Changes to TRA liability ( 31,651 ) 4.9 % Changes in unrecognized tax benefits ( 9,105 ) 1.4 % Other items: Deferred tax adjustment 37,380 ( 5.7 )% Other 3,867 ( 0.6 )% Income tax expense $ 69,385 ( 10.6 )% (1) State and local income taxes in California, Illinois, and New York made up more than 50% of the tax effect in this category. 98 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table presents the required disclosures prior to our adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax rate of 21 % to our actual global effective income tax rate for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 U.S. federal statutory income tax rate 21.0 % 21.0 % State and local income taxes, net of federal 3.1 % 2.2 % Foreign rate differential ( 1.9 )% 0.4 % Redeemable noncontrolling interests ( 1.9 )% ( 10.9 )% Change in valuation allowance ( 21.6 )% ( 131.9 )% Deferred tax adjustment 6.8 % 30.8 % Research and development credit ( 4.6 )% ( 1.1 )% Impact of restructuring 0.0 % 28.6 % Limitation on compensation deductions 13.1 % 1.5 % Equity-based compensation 6.5 % 0.0 % Tax rate change 13.1 % 0.0 % Other 3.4 % ( 0.1 )% Income tax expense (benefit) 37.0 % ( 59.5 )% The following table presents cash paid for income taxes by jurisdiction for the year ended December 31, 2025 (in thousands): Cash paid for U.S. income taxes: Federal $ 2,415 State and local 331 Total cash paid for U.S. income taxes 2,746 Cash paid for foreign federal income taxes: Canada 610 Japan 3,013 Total cash paid for foreign federal income taxes 3,623 Cash paid for income taxes $ 6,369 99 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table summarizes our deferred tax balances at December 31, 2025 and 2024 (in thousands): December 31, December 31, 2025 2024 Deferred tax assets – net Net operating loss $ 40,049 $ 12,487 Equity-based compensation 6,574 3,797 Interest carryforwards 13,541 20,126 Intangible assets and goodwill 116,092 — Accrued customer compensation 12,661 — Cancellation reserve 4,229 — Operating lease liabilities 4,686 — Investment in partnership — 28,446 TRA — 38,232 Other 12,661 3,037 Total deferred tax assets 210,493 106,125 Less: valuation allowance ( 200,312 ) ( 26,182 ) Total deferred tax assets – net 10,181 79,943 Deferred tax liabilities Intangible assets 4,881 6,779 Right-of-use assets 2,715 — Other 4,238 61 Total deferred tax liabilities 11,834 6,840 Net deferred tax asset / (liabilities) $ ( 1,653 ) $ 73,103 We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. As of December 31, 2025, we maintained a $ 200.3 million valuation allowance against the tax benefits of our U.S. net deferred tax assets because we determined these assets are not more likely than not to be realized as of December 31, 2025. In making this determination, we considered all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income (loss), tax planning strategies, and recent results of operations. Excluded from the deferred tax asset for investment in partnership at December 31, 2024 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. We disclose the deferred tax asset associated with items expected to be recovered through ordinary business operations; 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 following table summarizes the changes in the carrying amount of our deferred tax asset valuation allowance during the years ended December 31, 2025, 2024, and 2023 (in thousands): 2025 2024 2023 Valuation allowance at beginning of year $ 26,182 $ 32,318 $ 118,734 Prior period adjustments (1) — — ( 14,536 ) Charged (credited) to costs and expenses 159,819 ( 4,897 ) ( 72,968 ) Charged (credited) to other accounts 14,311 ( 1,239 ) 1,088 Valuation allowance at end of year $ 200,312 $ 26,182 $ 32,318 (1) In 2023, there was an adjustment to the investment in partnership and net operating loss deferred tax assets and related valuation allowance. This adjustment had no net impact to income tax benefit during the year ended December 31, 2023. 100 VIVID SEATS INC. NOTES to the Consolidated Financial Statements As of June 30, 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 was sufficient positive evidence to conclude that it was more likely than not that deferred tax assets of $ 31.3 million associated with our investment in partnership, U.S. net operating losses, interest expense limitations, and tax credit carryforwards were realizable. 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 associated with the investment in partnership deferred tax asset. As of June 30, 2025, in part because during the three months ended June 30, 2025 we (i) recorded a significant impairment of our goodwill and certain indefinite-lived intangible assets, (ii) entered into a cumulative loss position, and (iii) had a negative trend in earnings in the United States, we determined that there was sufficient negative evidence to conclude that our U.S. deferred tax assets associated with our investment in partnership, TRA, U.S. net operating losses, interest expense limitations, and tax credit carryforwards were not realizable. We therefore increased the valuation allowance accordingly. As of December 31, 2025, we maintained a valuation allowance against our net U.S. deferred tax assets of $ 200.3 million, as these assets are not more likely than not to be realized. At December 31, 2025, we had U.S. federal and state deferred interest carryforwards totaling $ 60.8 million, U.S. state operating loss carryforwards totaling $ 50.5 million, and U.S. federal operating loss carryforwards totaling $ 161.2 million. Certain of the U.S. federal and state operating loss carryforwards begin to expire in 2029 with the remainder of the U.S. federal and state net operating loss carryforwards having no expiration date. Certain tax attributes remain subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986 (as amended, the “ Code ”), as a result of the historical acquisitions. At December 31, 2025, with respect to our operations outside the United States, we had foreign operating loss carryforwards totaling $ 2.7 million, which begin to expire in 2037 . At December 31, 2025 , we were not indefinitely reinvested on undistributed earnings from our foreign operations. The deferred tax liability associated with the future repatriation of these earnings was $ 0.1 million. 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 during the years ended December 31, 2025, 2024, and 2023 (in thousands): 2025 2024 2023 Unrecognized tax benefits at beginning of year $ 7,500 $ 7,500 $ 7,500 Reductions due to lapse of statute of limitations ( 7,500 ) — — Unrecognized tax benefits at end of year $ — $ 7,500 $ 7,500 We are subject to routine audits by taxing jurisdictions. The periods subject to tax audits are 2021 through 2025. There are currently no audits for any tax periods in progress. TRA In connection with the Merger Transaction, we entered into the TRA with the existing Hoya Intermediate unitholders that provided 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 or 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 101 VIVID SEATS INC. NOTES to the Consolidated Financial Statements 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 of June 30, 2025, we determined that it was no longer probable that we will generate sufficient future taxable income to support a significant amount of the balance of the TRA liability previously recorded. After evaluating all available positive and negative evidence, we determined that significant negative objective and verifiable evidence (including cumulative losses generated by our domestic operations) existed to change our conclusion regarding the future realization of our deferred tax assets, which therefore significantly impacts the amount of future TRA payments that are probable to be made. As a result, the TRA liability was reduced by $ 149.2 million, which is recorded in Other income – net in the Consolidated Statements of Operations. In connection with the Corporate Simplification, all rights and obligations under the TRA were terminated (other than certain terms thereof that expressly survived), including $ 5.8 million of cash payments that would have otherwise been due in the first quarter of 2026, in exchange for the issuance of 403,022 shares of Class A common stock. As a result of the Corporate Simplification, we will no longer have a TRA liability. The termination of the TRA liability resulted in the recognition of a $ 0.9 million gain, which is recorded in Other income – net in the Consolidated Statements of Operations. See Note 1, Background and Basis of Presentation , for more information. OBBB Act On July 4, 2025, a reconciliation bill commonly referred to as the One Big Beautiful Bill Act (the “ OBBB Act ”) was signed into law, which included a broad range of tax reform provisions that may affect our financial results. The OBBB Act allows an elective deduction for domestic research and development, a reinstatement of elective 100% first-year bonus depreciation, and modifications to the calculation for excess business interest expense limitations under Section 163(j) of the Code. Our analysis shows that the OBBB Act did not have a material impact on our consolidated financial statements during the year ended December 31, 2025. We will continue to monitor regulatory guidance and interpretations as they are issued. 21. Equity-Based Compensation Our 2021 Incentive Award Plan (as amended, the “ Incentive Award Plan ”) was approved and adopted in order to facilitate the grant of equity incentive awards to our employees, directors, non-employee directors, and consultants. The Incentive Award Plan became effective in 2021 upon consummation of the Merger Transaction, and the First Amendment to the Incentive Award Plan became effective on February 5, 2024. In connection with the Reverse Stock Split, proportionate equitable adjustments were made to the number of shares of Class A common stock issuable under the Incentive Award Plan, as well as to the number of shares of Class A common stock underlying outstanding RSUs and stock options (and the exercise prices thereof). All share and per share amounts set forth reflect these adjustments. See Note 1, Background and Basis of Presentation , for more information. RSUs RSUs are awards that are denominated in a hypothetical equivalent number of shares of 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 converts into shares of Class A common stock upon vesting. During the years ended December 31, 2025, 2024, and 2023, we granted to certain employees 1.9 million, 0.6 million, and 0.1 million RSUs, respectively, at a weighted average grant date fair value of $ 23.90 per share, $ 106.00 per share, and $ 143.60 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, 2025, 2024, and 2023, we granted to our directors less than 0.1 million RSUs at a weighted average grant date fair value of $ 30.40 per share, $ 104.80 per share, and $ 153.60 per share, respectively. RSUs granted to directors fully vest on the earlier of (i) one day prior to the date of our first annual 102 VIVID SEATS INC. NOTES to the Consolidated Financial Statements meeting of stockholders following the grant date and (ii) the one-year anniversary of the grant date, subject to the director’s continued service on our Board. During the years ended December 31, 2025, 2024, and 2023, we granted to certain consultants less than 0.1 million RSUs at a weighted average grant date fair value of $ 14.94 per share, $ 74.00 per share, and $ 159.60 per share, respectively. RSUs granted to consultants either fully vest on the first anniversary of the grant date or in equal annual installments over three years, in each case subject to the consultant’s continued service through the applicable vesting date. As of December 31, 2025 , 0.4 million forfeited RSUs, previously held by certain former executives prior to their departure, were subject to reissuance and immediate vesting in the event of a Change in Control (as defined in the Incentive Award Plan) occurring within 12 months of their respective separation dates. The following table summarizes the total activity for RSUs during the years ended December 31, 2025 and 2024 (in thousands, except per RSU data): RSUs Weighted Average Grant Date Fair Value Per RSU Unvested at December 31, 2023 194 $ 167.00 Granted 569 105.80 Forfeited ( 30 ) 148.20 Vested ( 143 ) 158.60 Unvested at December 31, 2024 590 112.24 Granted 1,918 24.02 Forfeited ( 464 ) 72.65 Vested ( 342 ) 116.33 Unvested at December 31, 2025 1,702 $ 22.81 Stock Options 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 first 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. 2021 Stock Options On October 19, 2021, we granted to certain employees 0.2 million stock options at an exercise price of $ 261.80 per share and 0.1 million stock options at an exercise price of $ 300.00 per share (collectively, the “ 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 $ 4.60 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 $ 261.80 per share was modified and reduced by $ 4.60 per share to $ 257.20 per share (the “ 2021 Stock Option Modification ”). 2022 Stock Options On March 11, 2022, we granted to certain employees 0.1 million stock options at an exercise price of $ 205.20 per share and a grant date fair value of $ 79.80 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. 103 VIVID SEATS INC. NOTES to the Consolidated Financial Statements On November 11, 2022, we granted to certain employees less than 0.1 million stock options at an exercise price of $ 164.40 per share and a grant date fair value of $ 73.20 (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 0.2 million stock options at an exercise price of $ 143.40 per share and a grant date fair value of $ 66.00 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. On June 14, 2023, we granted to certain consultants less than 0.1 million stock options, divided into three tranches, at exercise prices of $ 159.60 , $ 340.00 and $ 460.00 per share, respectively, and grant date fair values of $ 64.40 , $ 37.40 and $ 28.80 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 & Repricing On December 7, 2023 (the “ Stock Option Cancellation and Repricing Date ”), (i) 44,742 of the 2021 Stock Options with an exercise price of $ 300.00 per share and 44,742 of the 2021 Stock Options with an exercise price of $ 257.20 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 $ 135.20 per share, the closing price of the Class A common stock on the Stock Option Cancellation and Repricing Date, provided  that if any of such stock options were exercised prior to the one-year anniversary of the Stock Option Cancellation and Repricing 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 S tock Option Cancellation and Repricing 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 table presents quantitative information about the significant unobservable inputs used to calculate the fair value of the 2023 Stock Options and the Stock Option Cancellation and Repricing: Significant Unobservable Inputs December 7, 2023 June 14, 2023 March 10, 2023 Expected term (years) 7.9 - 8.9 7.0 5.9 Expected volatility 47.0 % - 48.0 % 42.0 % 42.0 % Risk-free rate 4.2 % 4.0 % 3.9 % Expected dividend yield 0.0 % 0.0 % 0.0 % No stock options were granted during the years ended December 31, 2025 and 2024. As of December 31, 2025, less than 0.1 million forfeited stock options, previously held by certain former executives prior to their departure, were subject to reissuance and immediate vesting in the event of a Change in Control (as defined in the Incentive Award Plan) occurring within 12 months of their respective separation dates. 104 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table summarizes the total activity for stock options during the years ended December 31, 2025 and 2024 (in thousands, except price per stock option data): Stock Options Weighted Average Exercise Price Per Stock Option Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2023 440 $ 160.40 8.7 $ — Forfeited ( 28 ) 140.20 Expired ( 7 ) 138.00 Outstanding at December 31, 2024 405 162.20 7.7 $ — Forfeited ( 16 ) 143.40 Outstanding at December 31, 2025 389 $ 162.97 6.6 $ — Vested and exercisable at December 31, 2025 369 $ 155.67 The weighted average grant date fair value for stock options outstanding during the years ended December 31, 2025, 2024, and 2023 was $ 68.88 , $ 68.80 , and $ 57.60 , respectively. The weighted average grant date fair value for stock options forfeited during the years ended December 31, 2025, 2024, and 2023 was $ 66.00 , $ 70.60 , and zero , respectively. The weighted average grant date fair value for stock options vested during the years ended December 31, 2025, 2024, and 2023 was $ 70.09 , $ 71.60 , and $ 77.80 , respectively. The weighted average grant date fair value for stock options cancelled during the year ended December 31, 2023 was $ 73.60 . No stock options were cancelled during the years ended December 31, 2025 and 2024. Hoya Topco Profits Interests & 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. The fair value of the incentive units granted was estimated using the Black-Scholes model. The Black-Scholes model requires certain subjective inputs and assumptions, including the fair value Hoya Topco’s equity, the expected term, risk-free interest rates, and expected equity volatility. The fair value of incentive units is recognized as equity-based compensation expense on a straight-line basis over the requisite service period. We account for forfeitures as they occur. Changes in assumptions made on expected term, the risk-free rate of interest, and expected volatility can materially impact the estimate of fair value and, ultimately, how much equity-based compensation expense is recognized. The expected term is estimated based on the timing and probabilities until a major liquidity event. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and corresponds to the expected term. The expected volatility is estimated on the date of grant based on the average historical stock price volatility of comparable publicly traded companies. On June 10, 2024, the Hoya Topco Board approved the redemption, repurchase and cancellation by Hoya Topco of all of its outstanding profits interests held by our then 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 during the year ended December 31, 2024. On June 10, 2024, the Hoya Topco Board also approved the repurchase and cancellation by Hoya Topco of all of its outstanding phantom units held by our then 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 during the year ended December 31, 2024. There was no equity-based compensation expense previously recognized related to the phantom units. As part of the Corporate Simplification, the remaining Class D units held by former employees were cancelled. As of December 31, 2025, there were no profits interests outstanding. See Note 1, Background and Basis of Presentation , for more information. 105 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table summarizes the total activity for the Hoya Topco incentive units, Class D Units, and Class E Units during the years ended December 31, 2025 and 2024: Incentive Units Class D Units Class E Units Units Weighted Average Grant Date Fair Value Per Unit Units Weighted Average Grant Date Fair Value Per Unit Units Weighted Average Grant Date Fair Value Per Unit Outstanding at December 31, 2023 41,800 $ 46.40 97,617 $ 92.00 25,038 $ 509.20 Repurchased ( 41,030 ) 46.40 — — — — Cancelled — — ( 95,213 ) 86.20 ( 25,038 ) 509.20 Forfeited ( 770 ) 46.40 — — — — Outstanding at December 31, 2024 — — 2,404 321.80 — — Cancelled — — ( 2,404 ) 321.80 — — Outstanding at December 31, 2025 — $ — — $ — — $ — Equity-Based Compensation Expense During the years ended December 31, 2025, 2024, and 2023, equity-based compensation expense related to RSUs w as $ 31.8 million, $ 31.0 million, and $ 14.3 million, respectively. Unrecognized equity-based compensation expense related to unvested RSUs as of December 31, 2025 was $ 31.9 million, which is expected to be recognized over a weighted average period of approximately one year . During the years ended December 31, 2025, 2024, and 2023, equity-based compensation expense related to stock options was $ 5.7 million, $ 10.7 million, and $ 10.2 million, respectively. Unrecognized equity-based compensation expense related to unvested stock options as of December 31, 2025 was $ 0.5 million, which is expected to be recognized over a weighted average period of less than one year . During the years ended December 31, 2024 and 2023 , equity-based compensation expense related to profits interests was $ 4.6 million and $ 3.5 million, respectively. We did not recognize any equity-based compensation expense related to profits interests during the year ended December 31, 2025 and there was no unrecognized equity-based compensation expense related to profits interests as of December 31, 2025. Equity-based compensation for the years ended December 31, 2025, 2024, and 2023 excludes capitalized development costs of $ 0.7 m illion, $ 0.8 million, and $ 0.4 million, respectively. 22. Earnings Per Share We calculate basic and diluted net income (loss) 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 (loss) per share, and we do not present basic and diluted net income (loss) per share of Class B common stock. However, holder of Class B common stock are allocated income (loss) from 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 for a period is calculated by multiplying Hoya Intermediate’s net income (loss) 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. 106 VIVID SEATS INC. NOTES to the Consolidated Financial Statements The following table presents the net income (loss) attributable to Hoya Topco’s redeemable noncontrolling interests for the years ended December 31, 2025, 2024, and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 Net income (loss)—Hoya Intermediate $ ( 806,054 ) $ 13,427 $ 69,420 Hoya Topco’s weighted average % allocation of Hoya Intermediate's net income (loss) 36.2 % 36.3 % 55.6 % Net income (loss) attributable to Hoya Topco's redeemable noncontrolling interests $ ( 292,189 ) $ 4,877 $ 38,605 In connection with the Corporate Simplification, all of the Intermediate Units previously held by Hoya Topco (and corresponding shares of Class B common stock) were exchanged for an equal number of shares of Class A common stock on October 31, 2025. As a result, the net income (loss) attributable to Hoya Topco’s redeemable noncontrolling interests in the table above for the year ended December 31, 2025 only pertains to the period from January 1, 2025 through October 31, 2025. See Note 1, Background and Basis of Presentation for more information. 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 (loss), which includes our net income (loss) for activities outside of our investment in Hoya Intermediate, including income tax expense (benefit) for VSI’s portion of income (loss), 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. All share and per share amounts included in the calculation of basic and diluted net income (loss) per share of Class A common stock have been adjusted to reflect the Reverse Stock Split. See Note 1, Background and Basis of Presentation , for more information. 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 the Intermediate Warrants, to the extent they are dilutive. The following table presents the computation of basic and diluted net income (loss) per share of Class A common stock for the years ended December 31, 2025, 2024, and 2023 (in thousands, except share and per share data): Years Ended December 31, 2025 2024 2023 Numerator—basic Net income (loss) $ ( 721,490 ) $ 14,302 $ 113,141 Less: net (income) loss attributable to redeemable noncontrolling interests 292,189 ( 4,877 ) ( 38,605 ) Net income (loss) attributable to Class A common stockholders—basic ( 429,301 ) 9,425 74,536 Denominator—basic Weighted average Class A common stock outstanding—basic 7,252,290 6,616,546 4,633,926 Net income (loss) per Class A common stock—basic $ ( 59.20 ) $ 1.42 $ 16.08 Numerator—diluted Net income (loss) attributable to Class A common stockholders—basic $ ( 429,301 ) $ 9,425 $ 74,536 Weighted average effect of dilutive securities: Redeemable noncontrolling interests ( 292,189 ) 2,310 ( 23,401 ) RSUs — 8 79 Net income (loss) attributable to Class A common stockholders—diluted ( 721,490 ) 11,743 51,214 Denominator—diluted Weighted average Class A common stock outstanding—basic 7,252,290 6,616,546 4,633,926 Weighted average effect of dilutive securities: Redeemable noncontrolling interests 3,174,301 3,811,250 5,288,699 RSUs — 29,336 21,248 Weighted average Class A common stock outstanding—diluted 10,426,591 10,457,132 9,943,873 Net income (loss) per Class A common stock—diluted $ ( 69.20 ) $ 1.12 $ 5.15 107 VIVID SEATS INC. NOTES to the Consolidated Financial Statements Potential shares of 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 years ended December 31, 2025, 2024, and 2023 or if the issuance of shares is contingent upon events that did not occur by the end of the years ended December 31, 2025, 2024, and 2023. The dilution reflected in diluted net income (loss) 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 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 the number of shares of common stock issuable under securities that were excluded from the computation of diluted net income (loss) per share of Class A common stock for the years ended December 31, 2025, 2024, and 2023 and could potentially dilute earnings per share in the future: Years Ended December 31, 2025 2024 2023 RSUs 156,659 228,445 36,729 Stock Options 389,223 370,089 440,392 Public Warrants 338,342 338,342 338,342 Private Warrants 325,989 325,989 325,989 Exercise Warrants 1,700,000 1,700,000 1,700,000 Intermediate Warrants — 200,000 200,000 Amended Intermediate Warrants 200,000 — — 108 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.