0001628280-26-034716
SEC filingRevenue grew 12% YoY to $446M, net income swung to $48M profit from -$22M, driven by higher transaction fees and GMS growth.
In Q1 2026, StubHub reported revenue of $446.0 million, a 12.2% increase from $397.6 million in Q1 2025. This growth was driven by a higher average transaction fee rate charged to buyers and sellers, as well as an increase in Gross Merchandise Sales (GMS) per transaction. GMS rose 7% to $2.22 billion, reflecting ongoing market growth in international and North American secondary markets.
Gross margin improved slightly to 85% from 84% in the prior year, as cost of revenue increased only 5.4% versus revenue growth. Cost of revenue benefited from lower ticket substitution and inventory costs, partially offset by higher payment processing costs.
Net income swung from a loss of $22.2 million in Q1 2025 to a profit of $48.0 million. The improvement was primarily driven by a $25.2 million reduction in interest expense (due to lower variable rates and debt repayments), a $44.6 million favorable swing in foreign currency gains (mainly from remeasurement of Euro-denominated debt), and gains on derivatives of $5.5 million. Income from operations decreased slightly to $25.8 million from $26.8 million, as operating expenses grew faster than revenue.
Operating expense detail: Sales and marketing increased 3.2% to $225.9 million, with increases in stock-based compensation, sponsorship fees, and advertising. General and administrative expenses rose 49.0% to $105.6 million, driven by stock-based compensation ($22.3 million increase), professional services, and personnel costs. Operations and support increased 22.9% due to outsourced customer support.
Adjusted EBITDA grew 50% to $72.1 million, with margin expanding from 12% to 16%, excluding non-recurring items such as litigation reserves and indirect tax contingencies.
The MD&A does not provide segment-level financials; all results are reported on a consolidated basis. StubHub operates as a single business segment in the global ticketing marketplace.
Management expects existing cash and cash equivalents of $1.5 billion to fund operations for at least the next 12 months. The Credit Facilities mature in 2030, with the 2024 USD Term Loan incurring interest at SOFR +4.75% (8.42% as of March 31, 2026) and the Euro Term Loan at EURIBOR +5.00% (6.89%). No explicit revenue or earnings guidance is provided. The company highlights seasonal trends in GMS that impact free cash flow but notes a longer-term view using trailing twelve months free cash flow. Strategic priorities include continued investment in the marketplace and potential refinancing of credit facilities.
No material changes to critical accounting estimates or contractual obligations were disclosed.
Cash and cash equivalents rose to $1.53B as of March 31, 2026, up from $1.24B at December 31, 2025, primarily driven by strong operating cash flow of $298M. Total assets increased to $5.35B. The company maintains a sizeable cash position relative to its $1.50B net debt. Long-term debt obligations (net of discounts) edged down from $1.507B to $1.496B, largely due to favorable foreign exchange movements on the Euro-denominated tranche; no cash repayments were made in Q1 2026. However, a subsequent $100M voluntary repayment on the 2024 USD Term Loan occurred on May 5, 2026. Stockholders' equity increased markedly to $1.56B from $1.18B, reflecting net income of $48M and the conversion of redeemable preferred stock into common equity.
Total future purchase commitments stood at $122.4M as of March 31, 2026, including $38.7M due within one year. These commitments primarily relate to contractual inventory costs, sponsorship and partnership fees, and vendor contracts. Inventory costs recognized in Q1 2026 were $1.0M, down from $5.3M in the prior-year period. Sponsorship and partnership fees totaled $20.8M. Additionally, the company has significant indirect tax contingencies and legal accruals totaling $155M probable losses (current and non-current), including a $67.1M sales tax assessment accrual and a $29.2M VAT settlement offer.
No share repurchases or dividends were executed in Q1 2026. Capital expenditures were $7.8M, comprising $7.6M in capitalized software development costs and $0.2M in property and equipment. This represents 1.8% of revenue. The company’s debt structure includes a $1.004B USD Term Loan and a €452.4M Euro Term Loan, both maturing in 2030. The Revolving Credit Facility ($565M capacity) remains undrawn, with $43M in standby letters of credit outstanding. Stock-based compensation expense surged to $31M (from $5.5M a year ago), reflecting equity grants post-IPO.
The company operates as a single reportable segment. Revenue is primarily from transaction fees ($440.4M in Q1 2026, compared to $393.4M in Q1 2025), plus other revenue of $5.7M. No geographic revenue breakdown is provided in the notes.
Operating cash flow (CFO) of $298.4M far exceeded net income of $48.0M, reflecting strong working capital benefits. The primary driver was a $273.6M inflow from ‘Payments due to buyers and sellers’, a liability that fluctuates with transaction timing. Depreciation and amortization added $7.9M, stock-based compensation $31.0M, and other non-cash items (e.g., unrealized FX gains of $21.7M, deferred taxes of $3.9M) largely offset. Excluding working capital, cash generation was solid.
Capex of $7.8M (mostly software development) was modest at 2.6% of CFO. Financing used $4.6M, primarily for tax withholdings on equity awards ($2.6M) and deferred offering costs ($2.1M). No share repurchases or dividends were paid. Free cash flow (CFO minus capex) would approximate $290.6M, but was not explicitly stated per guidance.
Overall, operating cash flow quality is healthy though heavily influenced by working capital swings, which can reverse in future periods.