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    STUB
    Earnings call· Jun 2026(Q2 FY26)

    StubHub Holdings Q2 FY26 earnings call STUB

    Aug 12, 2026 Source

    Executive summary

    StubHub Q2 FY26 — Strong GMS Growth and Margin Expansion

    StubHub delivered a strong second quarter, driven by robust demand for live events, particularly the World Cup, which showcased the platform's global scale and liquidity. The company achieved significant GMS growth and margin expansion while actively deleveraging. Management is cautiously monitoring post-World Cup consumer spending and continues to invest in customer experience and new monetization avenues like advertising.

    Highlights

    5

    • GMS grew 34% year-over-year to $3.1 billion.

    • Adjusted EBITDA nearly doubled to $106 million.

    • Adjusted EBITDA margin expanded to 18%, an increase of approximately 600 basis points.

    • Net leverage improved to 3x trailing 12-month adjusted EBITDA, down from 4.5x at year-end 2025.

    • Total debt repayment over the last 12 months reached $1.1 billion.

    Concerns

    4

    • A small subset of World Cup orders experienced fulfillment issues, requiring increased investment in customer support.

    • Gross margin was approximately 82%, reflecting World Cup impact on payment processing and fulfillment efficiency, slightly compressed from typical mid-80% run rate.

    • G&A expenses increased year-over-year by approximately 160 basis points as a percentage of revenue due to elevated professional fees related to regulatory environment.

    • Potential for some level of shift in consumer spending patterns following the World Cup's concentration of demand.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full year GMS
    $10.1 billion to $10.3 billion
    high materiality
    High
    Full year Adjusted EBITDA
    $400 million to $420 million
    high materiality
    High
    Advertising revenue
    tens of millions of dollars
    medium materiality
    Medium
    Dilution from share-based compensation
    no greater than low single digits
    medium materiality
    High
    Dilution from share-based compensation
    low to mid-single-digit range
    medium materiality
    High

    Operational metrics

    22
    Gross Merchandise Sales (GMS)
    $3.1 billion34% year-over-year
    Q2 FY26

    Driven by strong World Cup performance.

    Adjusted EBITDA
    $106 millionnearly doubled year-over-year
    Q2 FY26

    Reflects healthy demand for live events and strong execution.

    Adjusted EBITDA margin
    18%approximately 600 basis points
    Q2 FY26

    Expansion driven by growth and marketing efficiency.

    Sales and marketing efficiency improvement
    800 basis pointsyear-over-year
    Q2 FY26

    Reflects improved efficiency at scale and lapping of accelerated investment in 2025.

    Net leverage
    3xdown from 4.5x at year-end 2025
    Q2 FY26

    Improved due to earnings growth and cash generation.

    Total debt repayment
    $1.1 billion
    LTM

    Demonstrates commitment to deleveraging.

    Revenue
    $573 million33% year-over-year
    Q2 FY26

    Primarily driven by strong World Cup performance.

    GMS to revenue conversion
    19%roughly flat year-over-year
    Q2 FY26

    Reflecting World Cup's impact on overall pricing and catalog mix.

    Gross margin
    82%
    Q2 FY26

    Reflecting World Cup's impact on payment processing and fulfillment efficiency, typically mid-80% run rate.

    Sales and marketing expenses as percentage of revenue
    47%approximately 800 basis point improvement year-over-year
    Q2 FY26

    Achieving leverage while increasing GMS.

    Operations and support costs as percentage of revenue
    3%up 32% year-over-year
    Q2 FY26

    Inclusive of continued investment in customer support.

    G&A expenses as percentage of revenue
    increased approximately 160 basis pointsyear-over-year
    Q2 FY26

    Driven primarily by elevated professional fees related to the evolving regulatory environment and associated legal matters.

    Net income
    $14.6 million
    Q2 FY26

    Includes $69 million of stock-based compensation expense and other nonrecurring items.

    Stock-based compensation expense
    $69 million
    Q2 FY26

    Driven in part by previously announced adjustments to equity program.

    Capital expenditures as percentage of revenue
    2%
    Q2 FY26

    Reflects asset-light business model.

    Interest income
    $12 million
    Q2 FY26

    Generated during the quarter.

    Net Operating Losses (NOLs)
    $1.2 billion
    current

    Benefit to the company.

    Cash and cash equivalents
    $1.7 billion
    Q2 FY26

    Provides meaningful flexibility for capital allocation.

    Cash and cash equivalents net of seller payables
    $490 million
    Q2 FY26

    Reflects liquidity position.

    Total outstanding gross debt
    $1.3 billion
    current

    Reduced through debt repayments.

    Debt repayment (US dollar term loan)
    $100 million
    subsequent to Q2 FY26

    Further demonstrates commitment to deleveraging.

    High-demand concert ticket sales by resellers
    10%
    2025

    Estimate of the portion of GMS attributable to this specific type of sale, relevant to regulatory discussions.

    Product announcements

    2
    ProductTypeDetails
    Distribution Managerupdate
    Sponsored listingslaunch

    Deals & partnerships

    2
    American ConferenceDistribution partner for rights holders

    Expanded distribution partners to refine product and demonstrate value of open distribution.

    NCAADistribution partner for rights holders

    Expanded distribution partners to refine product and demonstrate value of open distribution.

    Risks & headwinds

    4
    World Cup fulfillment issuesQ2 FY26

    A small subset of orders experienced fulfillment issues

    Mitigation: Increased investment in customer support and fulfillment; continuous effort to eliminate issues, aiming for 100% satisfaction.

    Consumer spending patterns post-World CupRemainder of the calendar year

    Potential for some level of shift in consumer spending patterns

    Mitigation: Disciplined GMS growth outlook; monitoring consumer spending patterns closely.

    Regulatory environment / price capsOngoing

    ~10% of global GMS in 2025 attributable to high-demand concert ticket sales by resellers

    Mitigation: Advocacy for open, liquid markets; diversification across event types and geographies; engagement with legislators to highlight ineffectiveness of price caps (e.g., D.C. legislation carves out sports, U.K. and New York proposals failed).

    Elevated G&A expensesQ2 FY26

    Increased approximately 160 basis points as a percentage of revenue year-over-year

    Mitigation: Improved sequentially down more than 200 basis points from the first quarter; focus on efficiency.

    What to watch in Q3 FY26

    5

    Consumer spending patterns post-World Cup

    Remainder of the calendar year / next quarter
    Currenttoo early to tell from the data
    TargetStable or continued healthy demand for live events

    Why it matters

    To assess if the World Cup caused a pull-forward📎 of demand or if overall consumer resilience for live events continues.

    What I'd say is the data that we have today, it's too early to read and really draw any level of conclusion. What we know is there's a healthy event calendar out there. And whenever and wherever that demand does come to fruition, we'll be right there to actually capture it.

    Q&A highlights

    5

    Inquired about the philosophy on sales and marketing efficiency, its potential for growth or further leverage in H2, and key strategic investments planned for H2.

    Management highlighted that the Q2 sales and marketing efficiency (800 bps improvement) was expected due to market leadership and strong tailwinds. They expect this efficiency to continue in H2, combined with normalization of World Cup-related costs, leading to margin expansion. Strategic investments were implicitly in customer experience and regulatory advocacy.

    “As you look into the second half, what I can say is that we do continue to expect to see this efficiency flowing through from sales and marketing providing a benefit, as well as the alleviation of some of those temporary costs subsiding allows us to see this clear pathway to margin expansion.”

    asked by Eric Sheridan · answered by Constance James

    2 min read6 chapters

    Detailed Narrative

    01

    World Cup Impact and Operational Complexity

    The World Cup was a significant event for StubHub in Q2 FY26, driving GMS growth and demonstrating the platform's global capabilities, with fans from over 150 countries using the service. This event, featuring 75 matches in 2.5 weeks, presented unique operational challenges due to its scale and a bespoke ticketing system. StubHub proactively increased investment in customer support and fulfillment to address a small subset of orders that experienced fulfillment issues, which temporarily impacted gross margins.

    02

    Marketplace Strengths and Diversification

    StubHub's marketplace model leverages deep supply, technology, and data to connect over 1 million sellers with millions of fans globally, providing broad selection and trusted transactions. The company highlights its diversification across sellers, content rights holders, buyers, event types, and geographies. This broad base is seen as a key strength, providing insulation against potential regulatory changes that might affect specific market segments or jurisdictions.

    03

    Open Distribution and Rights Holder Partnerships

    StubHub is actively expanding its open distribution model, offering content rights holders non-exclusive access to its buyer base and distribution infrastructure at no charge. This initiative aims to provide rights holders with greater flexibility, global demand, and pricing insights. The company is making progress with its AI-powered 'Distribution Manager' self-service platform and has formed partnerships with entities like the American Conference and NCAA to refine its product offering.

    04

    Advertising Monetization

    The company is in the early stages of developing sponsored listings as a new, high-margin revenue opportunity. This feature allows sellers to compete more effectively and helps fans discover relevant inventory. StubHub is focused on optimizing auction mechanics, pricing, conversion rates, and user experience to ensure it is additive to the consumer experience. Full-year advertising revenue is expected to be in the tens of millions of dollars.

    05

    Regulatory Environment and Advocacy

    StubHub actively engages with legislators to advocate for open, liquid resale markets, aligning with goals for fan access, transparency, and fraud protection. Management noted that regulatory focus tends to be on high-demand concert tickets, which represent approximately 10% of global GMS in 2025. Recent legislative developments, such as D.C.'s Resale Act carving out sporting events and the failure of price cap proposals in the U.K. and New York, suggest a growing understanding among policymakers of the complexity and essential role of the resale market.

    06

    Financial Performance and Deleveraging

    StubHub delivered strong financial results in Q2 FY26, characterized by significant GMS growth, expanding margins, and healthy free cash flow generation. The company's net leverage improved to 3x trailing 12-month adjusted EBITDA from 4.5x at year-end 2025. Total debt repayment over the last 12 months reached $1.1 billion, including a $100 million repayment of its U.S. dollar term loan subsequent to quarter end, demonstrating a strong commitment to strengthening the balance sheet.

    AI-generated summary of the company’s earnings call. Not investment advice.