StubHub (NYSE:STUB) executives used the company’s fourth-quarter and year-end 2025 earnings call to emphasize market share gains in North American secondary ticketing, a more product-led approach to direct issuance, and expectations for significant adjusted EBITDA expansion in 2026. Management also highlighted balance sheet changes following the company’s IPO and discussed the regulatory backdrop for ticket resale.
2025 performance and marketplace position
Founder, Chairman and CEO Eric Baker described 2025 as a “pivotal year,” saying StubHub grew its marketplace, strengthened its competitive position, transformed its balance sheet, and became a public company. Baker said StubHub remains a leading global ticketing marketplace and pointed to several competitive strengths, including an asset-light model, “over 80% adjusted gross margins,” and scale-driven network effects.
For the full year, James said StubHub delivered $9.2 billion of gross merchandise sales (GMS), up 6% year-over-year. Excluding The Eras Tour, she said GMS growth was 18%, which she characterized as reflecting the underlying performance of the business.
Fourth-quarter results: GMS and revenue pressured by tough comparisons
In the fourth quarter of 2025, StubHub generated $2.3 billion of GMS, down 8% year-over-year. James attributed the decline to lapping an “unusually strong” fourth quarter of 2024, which she said benefited from several favorable dynamics including the conclusion of The Eras Tour, a strong MLB World Series, and the timing of major concert on-sales shifting across quarters. Excluding Eras-related comparability, she said fourth-quarter GMS growth was approximately 6%.
Fourth-quarter revenue was $449 million, representing 19% of GMS, down 16% year-over-year. James said the change was primarily due to lower GMS and was partially offset by lapping prior-year direct issuance-related minimum guarantee structures that were treated as principal revenue and have since been reduced. She also said revenue as a percentage of GMS reflected “deliberate market share investments through take rate adjustments.”
Adjusted gross margin in the quarter was 83%, up from 76% a year earlier, which James tied to the lapping of those minimum guarantee structures. Adjusted sales and marketing expense rose to $234 million, or 52% of revenue, from $221 million, or 41% of revenue, as the company invested to accelerate market share in core resale.
Adjusted EBITDA in the quarter was $63 million, a 14% margin. James said the result reflected the impact of market share investments and continued investment in direct issuance capabilities in an early partnership development phase.
Full-year profitability, IPO-related GAAP impacts, and debt reduction
For full-year 2025, James reported revenue of $1.7 billion, or 19% of GMS, compared with $1.8 billion in 2024. She said the year-over-year performance was impacted primarily by direct issuance-related minimum guarantee structures in the prior period and the effect of take rate adjustments tied to market share investments.
Adjusted gross margin for 2025 was 83%, up 200 basis points from 2024. Adjusted sales and marketing expenses increased to $943 million, or 54% of revenue, from $828 million, or 47%, reflecting investments to accelerate market share and continued investment in direct issuance capabilities. Adjusted EBITDA was $232 million, equal to a 13% margin.
James also called out two non-recurring GAAP items tied to the IPO. She said GAAP results for the year included a $1.4 billion non-cash stock-based compensation expense related to awards granted prior to the IPO, triggered when IPO-related performance conditions were satisfied. In addition, she said the company incurred a non-cash income tax expense of approximately $480 million related to establishing a valuation allowance on deferred tax assets. She noted both items are excluded from adjusted EBITDA and do not impact cash flow or cash position.
On cash generation, James emphasized StubHub’s marketplace model collects funds from buyers at checkout while seller payouts occur later, often closer to or after the event date. She said free cash flow can be variable quarter-to-quarter due to seasonality and event timing, and that the company evaluates free cash flow on a full-year and trailing 12-month basis. In 2025, she said free cash flow represented “nearly 70% conversion of adjusted EBITDA,” including interest costs that have since been reduced following debt repayments.
StubHub also reduced leverage in 2025, repaying about $900 million of U.S.-denominated term loans and reducing total debt by approximately 35% to $1.5 billion at year-end. The company ended the year with approximately $1.2 billion of cash and cash equivalents, or $494 million net of payments due to sellers.
2026 outlook: GMS growth and sharp adjusted EBITDA expansion
James said StubHub will provide annual rather than quarterly guidance due to seasonality and the timing of concert on-sales and event schedules, which can create “lumpiness” in quarterly growth rates. She cited the contrast between fourth-quarter 2024 GMS growth of 47% and fourth-quarter 2025’s 8% decline as an example, noting market share was higher in the period with declining GMS.
For 2026, StubHub expects GMS of $9.9 billion to $10.1 billion, representing 9% growth at the midpoint, and adjusted EBITDA of $400 million to $420 million. James said the guidance reflects the earnings power of the core resale marketplace and includes disciplined operating expenses to support direct issuance and advertising, without assuming any material revenue contribution from either initiative.
Management described the GMS growth framework as the combination of North American secondary market growth, incremental market share gains, and international growth. James said international markets represent approximately 15% of GMS and are expected to grow at an accelerated rate due to earlier-stage development. She also noted an “all-in pricing” comparability impact until the company laps implementation in May.
Direct issuance, advertising tests, AI initiatives, and regulation
On direct issuance, Baker said the company views “non-exclusive open distribution” of originally issued tickets as a transformational long-term opportunity, and that StubHub has made business development progress with “marquee content rights holders” across sports and music in multiple geographies. However, he said the company’s experience indicates the largest potential comes from making direct issuance “frictionless” to adopt across a broader range of rights holders, including those with varying levels of technological sophistication.
As a result, Baker said StubHub is prioritizing building the product foundation required to scale direct issuance broadly in 2026, including AI-assisted tools intended to automate workflows and simplify inventory management. He described a shift from a primarily business development-led strategy to a more product-led strategy, and said the company will not be optimizing for immediate revenue growth in the initiative.
Advertising was described as an early-stage effort. Baker said StubHub began rolling out an ad product, including sponsored listings, in the fourth quarter and saw a good reaction from sellers, but plans to spend more time refining the product in 2026. James said advertising revenue in the fourth quarter was “a very small modest amount,” and that 2026 guidance includes only a “very modest” contribution, which she framed as “tens of millions of dollars.”
On AI, Baker said the company views it as transformational and highlighted both operational and product opportunities, including marketplace operations like fulfillment, payments, fraud prevention, and support, as well as discovery and new interfaces such as chat-based purchasing. James added that the company is already exploring efficiency gains in operations and support and sees opportunities across engineering.
Finally, management discussed the regulatory environment. Baker said StubHub continues to operate within a “generally favorable status quo” supporting open resale markets, while acknowledging increased public discussion around ticketing. He said the most visible focus tends to be on a subset of the market: resellers listing large quantities of high-demand concert inventory at prices significantly above original sale prices. Based on internal data, he estimated that these types of sales represented approximately 10% of StubHub’s 2025 GMS. Baker said StubHub’s diversification across sellers, content, buyers, event types, and geographies provides insulation from changes affecting a single subset of the market or jurisdiction, and he said the company is bolstering government relations efforts.
Regarding the Live Nation/Ticketmaster trial, Baker said he views the discussion as centered on primary ticketing monopoly power and the need for more open distribution. He said StubHub supports open distribution, but does not bake potential changes from the trial into guidance and is not in a position to predict outcomes.
About STUB (NYSE:STUB)
Stubhub Holdings Inc, through its subsidiaries, provides an online marketplace to buy and sell tickets for sports, concerts, theater, festivals and other live events. Stubhub Holdings Inc is based in NEW YORK.
