EVENTBRITE, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-K)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the information set forth under
"Selected Financial Data" and our consolidated financial statements and related
notes included elsewhere in this Annual Report on Form 10-K. In addition to
historical financial information, the following discussion and analysis contains
forward-looking statements that are based upon current plans, expectations and
beliefs that involve risks and uncertainties. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of various factors, including those set forth under "Risk Factors" in
this Annual Report on Form 10-K. Our fiscal year ends December 31.

Overview

Eventbrite is a global self-service ticketing and experience technology platform
that serves event creators and empowers their success. Our mission is to bring
the world together through live experiences, and since inception, we have been
at the center of the experience economy, helping to transform the way people
organize and attend events.

The Eventbrite platform was built as a self-service platform to make it possible
for anyone to create and sell tickets to live experiences. We have a
creator-aligned business model: we succeed when our creators succeed. We allow
hosts of free events to use our platform for free and we charge creators of paid
events on a per-ticket basis when an attendee purchases a ticket for an event.
Our platform integrates seamlessly with internally-developed and third-party
features designed to help our creators sell more tickets and scale their
businesses.

The global COVID-19 pandemic has tested our mission, our company and event
creators in unprecedented ways. In the early days of the pandemic, we adapted
quickly to meet creators' urgent shift to online events, and over the past year,
we pivoted back to powering in-person events accordingly as restriction eased.
During 2021, paid ticket volume for in-person events increased by 53%. We expect
continued volatility in these trends considering the continued impact from the
COVID-19 pandemic. Significant uncertainty remains regarding the extent and
duration of the impact on our business. The full extent to which COVID-19
impacts our business, results of operations and financial condition cannot be
predicted at this time. The impact of COVID-19 may persist for an extended
period of time or become more pronounced which may result in a reduction in paid
ticket volume and an increase in event cancellation losses.

In March 2021, we issued $212.75 million aggregate principal amount of 0.750%
convertible senior notes due 2026 (2026 Notes) in a private offering, inclusive
of the initial purchaser's exercise in full of its option to purchase additional
notes. We used $153.2 million of the proceeds from this offering to repay in
full the outstanding indebtedness under our May 2020 credit agreement and $18.5
million of the net proceeds from this offering to pay the cost of the 2026
Capped Calls transactions. We intend to use the remainder of the net proceeds
from this offering for general corporate purposes.

In May 2021, we launched Eventbrite Boost which provides tools to event creators
to increase their following on social networks, like Instagram and Facebook,
create branded emails and marketing materials, track ticket sales, and optimize
and automate their advertising. Eventbrite Boost helps creators make informed
marketing decisions to grow their businesses. Real-time dashboards deliver
personalized recommendations on the best marketing campaigns to run and also
provide direct insight into how their campaigns are performing.


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Key Business Parameters and Non-GAAP Financial Measures

We monitor key metrics to help us evaluate our business, identify trends
affecting our business, formulate business plans and make strategic decisions.
In addition to revenue, net loss, and other results under GAAP, the following
table sets forth key business metrics and non-GAAP financial measures we use to
evaluate our business. We believe these metrics and measures are useful to
facilitate period-to-period comparisons of our business. We believe that the use
of Adjusted EBITDA is helpful to our investors as this metric is used by
management in assessing the health of our business and our operating
performance. This measure, which we refer to as our non-GAAP financial measure,
is not prepared in accordance with GAAP and has limitations as an analytical
tool, and you should not consider this in isolation or as substitutes for
analysis of our results of operations as reported under GAAP. You are encouraged
to evaluate the adjustments and the reasons we consider them appropriate.

                                                  Year Ended December 31,
                                            2021           2020           2019
                                                      (in thousands)
               Non-GAAP and Other Data
               Paid ticket volume            67,427          47,092     109,428
               Adjusted EBITDA            $ 1,005      $ (134,075)     $ (5,641)



Paid Ticket Volume

Our success in serving creators is measured in large part by the number of
tickets sold on our platform that generate ticket fees, referred to as paid
ticket volume. We consider paid ticket volume an important indicator of the
underlying health of the business. We have previously referred to this metric as
'paid tickets' and we calculate and report paid ticket volume in the same manner
as we calculated and reported paid tickets. Our paid ticket volume for events
outside of the United States represented 35%, 39% and 36% for the years ended
December 31, 2021, 2020 and 2019, respectively.

Adjusted EBITDA

Adjusted EBITDA is a key performance measure that our management uses to assess
our operating performance. Because Adjusted EBITDA facilitates internal
comparisons of our historical operating performance on a more consistent basis,
we use this measure for business planning purposes and in evaluating acquisition
opportunities.

We calculate Adjusted EBITDA as net loss adjusted to exclude depreciation and
amortization, stock-based compensation expense, interest expense, the change in
fair value of redeemable convertible preferred stock warrant liability, loss on
debt extinguishment, direct and indirect acquisitions related costs, employer
taxes related to employee equity transactions, other income (expense), net,
which consisted of interest income, foreign exchange rate gains and losses and
changes in fair value of term loan embedded derivatives, and income tax
provision (benefit). Adjusted EBITDA should not be considered as an alternative
to net loss or any other measure of financial performance calculated and
presented in accordance with GAAP.


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The following table provides a reconciliation of our adjusted EBITDA to the most comparable GAAP measure, net loss, for each of the periods indicated:

                                                                    Year Ended December 31,
                                                          2021                2020                2019
                                                                         (in thousands)
Net loss                                              $ (139,080)         $ (224,718)         $ (68,760)
Add:
Depreciation and amortization                             18,716              22,610             24,324
Stock-based compensation                                  47,523              40,215             37,594
Interest expense                                          16,267              24,586              2,986

Loss on debt extinguishment                               49,977                   -              1,742
Direct and indirect acquisition related costs(1)               -                 190                837
Employer taxes related to employee equity
transactions                                               2,544               1,190              1,555
Other (income) expense, net                                3,630               1,932             (5,727)
Income tax provision (benefit)                             1,428                 (80)              (192)
Adjusted EBITDA                                       $    1,005          $ (134,075)         $  (5,641)



(1) Direct and indirect acquisition related costs consist primarily of
transaction and transition related fees and expenses incurred within one year of
the acquisition date, including legal, accounting, tax and other professional
fees as well as personnel-related costs such as severance and retention bonuses
for completed, pending and attempted acquisitions.

Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not
properly reflect capital spending that occurs off of the income statement or
account for future contractual commitments, (ii) although depreciation and
amortization are noncash charges, the underlying assets may need to be replaced
and Adjusted EBITDA does not reflect these capital expenditures and (iii)
Adjusted EBITDA does not reflect the interest and principal required to service
our indebtedness. Our Adjusted EBITDA may not be comparable to similarly titled
measures of other companies because they may not calculate Adjusted EBITDA in
the same manner as we calculate the measure, limiting its usefulness as a
comparative measure. In evaluating Adjusted EBITDA, you should be aware that in
the future we will incur expenses similar to the adjustments in this
presentation. Our presentation of Adjusted EBITDA should not be construed as an
inference that our future results will be unaffected by these expenses or any
unusual or non-recurring items. When evaluating our performance, you should
consider Adjusted EBITDA alongside other financial performance measures,
including our net loss and other GAAP results.



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Operating results

The results of operations presented below should be reviewed in conjunction with
the consolidated financial statements and notes included in Part II, Item 8,
"Financial Statements and Supplementary Data" of this Annual Report on Form
10-K.

For a discussion and comparison of the years ended December 31, 2020 and 2019,
please refer to Part II, Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the 2020 Annual Report on Form
10-K filed with the SEC on March 1, 2021. The following tables set forth our
consolidated results of operations data and such data as a percentage of net
revenue for the periods presented:

                                                    Year Ended December 31,
                                              2021            2020          

2019

                                                        (in thousands)
Consolidated Statements of Operations
Net revenue                               $  187,134      $  106,006      $ 326,801
Cost of net revenue                           70,294          62,330        129,141
         Gross profit                        116,840          43,676        197,660
Operating expenses:
Product development                           66,303          54,551         64,196
Sales, marketing and support                  35,916          84,259        102,874
General and administrative                    82,399         103,146        100,541
Total operating expenses                     184,618         241,956        267,611
Loss from operations                         (67,778)       (198,280)       (69,951)
Interest expense                             (16,267)        (24,586)        (2,986)
Loss on debt extinguishment                  (49,977)              -         (1,742)
Other income (expense), net                   (3,630)         (1,932)         5,727
Loss before income taxes                    (137,652)       (224,798)       (68,952)
Income tax provision (benefit)                 1,428             (80)          (192)
Net loss                                  $ (139,080)     $ (224,718)     $ (68,760)



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                                                     Year Ended December 31,
                                                   2021                2020       2019
Consolidated Statements of Operations,
as a percentage of net revenue
Net revenue                                                100  %      100  %     100  %
Cost of net revenue                                         38          59         40
         Gross profit                                       62          41         60
Operating expenses:
Product development                                         35          51         20
Sales, marketing and support                                19          79         31
General and administrative                                  44          97         31
Total operating expenses                                    98         227         82
Loss from operations                                       (36)       (186)       (22)
Interest expense                                            (9)        (23)        (1)
Loss on debt extinguishment                                (27)          -         (1)
Other income (expense), net                                 (2)         (2)         2
Loss before income taxes                                   (74)       (211)       (22)
Income tax provision (benefit)                               1           -          -
Net loss                                                   (73) %     (211) %     (22) %

Comparison of years ended December 31, 2021 and 2020

Net revenue

We generate revenues primarily from service fees and payment processing fees
from the sale of paid tickets on our platform. We also derive a smaller portion
of revenues from a series of marketing services and tools that enable creators
to market their events and increase reach to attendees. Our fee structure
typically consists of a flat fee and a percentage of the price of each ticket
sold by a creator. Revenue is recognized when control of promised goods or
services is transferred to the creator, which for service fees and payment
processing fees is when the ticket is sold. Net revenue excludes sales taxes and
value-added taxes (VAT) and is presented net of estimated customer refunds,
chargebacks and amortization of creator signing fees.

                     Year Ended December 31,                 Change
                       2021               2020            $            %
                            (in thousands, except percentages)
Net revenue    $     187,134           $ 106,006      $ 81,128        77  %


The increase in net revenue during 2021 compared to 2020 was primarily due to
increase in our paid ticket volume which increased by 20.3 million or 43% as
COVID-19 restrictions eased. Additionally, there was a decrease in refunds
reserves of $15.7 million during the year ended December 31, 2021. This was
attributable to lower cancellations and refund activity compared to a year ago
which was significantly higher at the onset of the COVID-19 pandemic. The
remainder of the increase in net revenue during 2021 was due to a $5.7 million
decrease in amortization of creator signing fees.

The net revenue per paid ticket was $2.78 in the year ended December 31, 2021
compared to $2.25 in 2020. The increase in net revenue per ticket paid during the year was primarily driven by lower refunds per ticket paid, reflecting a reduced impact from COVID-related event cancellations.

Net income cost

Cost of net revenue consists of variable costs related to payment processing
fees and fixed costs related to making our platform generally available. Our
fixed costs consist primarily of expenses associated with the operation and
maintenance of our platform, including website hosting fees and platform
infrastructure costs, amortization of capitalized software development costs,
on-site operations costs and customer support costs. Cost of net revenue also
includes the amortization expense related to our acquired developed technology
assets, which may be incurred in future periods related to future acquisitions.
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Generally, we expect cost of net revenue to fluctuate as a percentage of net
revenue in the near- to mid-term primarily driven by the fixed costs absorption
relative to total net revenue and our geographical revenue mix. Our payment
processing costs for credit and debit card payments are generally lower outside
of the United States due to a number of factors, including lower card network
fees and lower cost alternative payment networks. Consequently, if we generate
more revenue internationally, we expect that our payment processing costs will
decline as a percentage of revenue. As our total net revenue increases or
decreases and our fixed costs are unaffected, our cost of net revenue as a
percentage of net revenue will similarly fluctuate.

                                          Year Ended December 31,                 Change
                                         2021                  2020            $           %
                                                (in thousands, except percentages)
Cost of net revenue                 $    70,294             $ 62,330       $ 7,964        13  %
Percentage of total net revenue              38   %               59  %
Gross margin                                 62   %               41  %


The increase in cost of net revenue during the year ended December 31, 2021
compared to 2020 was primarily due to an increase of $15.6 million in payment
processing costs in line with the increased volume and fees earned from payment
processing services. This was primarily offset by a $4.9 million decrease in
customer support costs and field operations costs driven by our change in
business strategy to self-service creators, and a $2.4 million decrease in
depreciation of equipment and amortization of capitalized internal-use software
development costs.

Our gross margin improved during the year ended December 31, 2021 compared to
2020 primarily due to better fixed cost absorption as ticket volume and revenue
increased.

Operating Expenses

Operating expenses consist of product development, sales, marketing and support
and general and administrative expenses. Direct and indirect personnel costs,
including stock-based compensation expense, are the most significant recurring
component of operating expenses. We also include sublease income as a reduction
of our operating expenses.

Creator-related expenses, which consist primarily of reserves for estimated prepayment losses and recoverability of upfront payments, were significantly higher at the onset of the COVID-19 pandemic.

As our total net revenue increases or decreases and to the extent our operating
expenses are not equally affected, our operating expenses as a percentage of net
revenue will similarly fluctuate.

Product development.

Product development expenses consist primarily of costs associated with our
employees in product development and product engineering activities. We expect
our product development expenses to continue to increase in absolute dollars
over the long term. In the near-term, we anticipate our product development
expenses will increase as we focus on enhancing and expanding the capabilities
of our platform. We also expect to continue investing in building Eventbrite's
infrastructure to enhance and support the development of new technologies. Over
the long-term, we anticipate that product development expenses will decrease as
a percentage of net revenue as we expect our revenue to recover and grow at a
faster pace compared to operating expenses and as we continue to expand our
development staff in lower cost markets.

                                          Year Ended December 31,                 Change
                                         2021                  2020            $            %
                                                 (in thousands, except percentages)
Product development                 $    66,303             $ 54,551       $ 11,752        22  %
Percentage of total net revenue              35   %               51  %


The increase in product development costs during 2021 compared to 2020 was
primarily driven by employee-related costs including stock-based compensation as
we continued to focus our investment on building technology products for our
platform.
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Sales, Marketing and Support.

Sales, marketing and support expenses consist primarily of costs associated with
our employees involved in selling and marketing our products and in public
relations and communication activities, in addition to marketing programs spend.
For our sales teams, this also includes commissions. Sales, marketing and
support expenses are driven by investments to grow and retain creators and
attendees on our platform. Additionally, we classify certain creator-related
expenses, such as refunds of the ticket price paid by us on behalf of a creator
and reserves for estimated advance payout losses, as sales, marketing and
support expenses.

Reserves for estimated advance payout losses were lower in 2021 compared to
2020, as the volume of COVID-related event cancellations and postponements was
significantly higher in prior year. Due to the nature of the COVID-19 situation
and the limited amount of currently available data, there is a high degree of
uncertainty around these reserves and our actual losses could be materially
different from our current estimates. We will adjust our recorded reserves in
the future to reflect our best estimates of future outcomes.

                                        Year Ended December 31,                  Change
                                       2021                  2020             $            %
                                               (in thousands, except percentages)
Sales, marketing and support      $    35,916             $ 84,259       $ (48,343)      (57) %
Percentage of total net revenue            19   %               79  %


The decrease in sales, marketing and support expenses during 2021 compared to
2020 was primarily due to a $39.5 million decrease in reserves for estimated
advance payout losses, which reflected the favorable resolution of advance
payouts outstanding with more events being completed on time, lower rate of
events being postponed and lower than expected chargeback activity since the
start of COVID-19 pandemic. Additionally, employee-related costs decreased by
$9.5 million due to 40% lower headcount resulting from the reduction in
workforce in 2020.

General and administrative.

General and administrative expenses consist of personnel costs, including
stock-based compensation, and professional fees for finance, accounting, legal,
risk, human resources and other corporate functions. Our general and
administrative expenses also include accruals for sales and business taxes, as
well as reserves and impairment charges related to creator upfront payments.
Over the long-term, we anticipate general and administrative expenses to decline
as a percentage of net revenue as we expect to grow our net revenues and scale
our business.

                                      Year Ended December 31,                 Change
                                        2021              2020             $            %
                                              (in thousands, except percentages)

general and administrative $82,399 $103,146 ($20,747) (20)% Percentage of total net income

             44   %           97  %


The decrease in general and administrative expenses during 2021 compared to 2020
was largely attributable to a $22.7 million decrease in creator upfront reserves
which was significantly higher in 2020 as a result of the effects of the
COVID-19 pandemic. This was offset by a $3.5 million increase in stock-based
compensation.

Interest Expense

Interest expense for the year ended December 31, 2021 consisted primarily of
cash interest expense and amortization of debt discount and issuance costs on
our term loans under the May 2020 credit agreement, 2025 Notes and 2026 Notes.
The credit agreement entered into in May 2020 was terminated on March 11, 2021.
In March 2021, we issued the 2026 Notes, which consisted of $212.75 million
aggregate principal amount of 0.750% convertible senior notes due 2026. In June
2020, we issued the 2025 Notes, which consisted of $150.0 million aggregate
principal amount of 5.000% senior notes due 2025.

Prior to the adoption of ASU 2020-06, we separated the conversion option of the
2025 Notes from the debt instrument and classified the conversion option in
equity. We early adopted ASU 2020-06 on January 1, 2021, which resulted in the
elimination of the debt discount created by bifurcating the conversion option in
equity.
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                                          Year Ended December 31,                 Change
                                         2021                  2020            $            %
                                                 (in thousands, except percentages)
Interest expense                    $    16,267             $ 24,586       $ (8,319)      (34) %
Percentage of total net revenue               9   %               23  %


The decrease in interest expense during 2021 compared to 2020 was primarily due
to a $11.3 million decrease in interest on the term loans as they were repaid in
the first quarter of 2021. This was offset by an increase of $2.9 million in
interest on the 2025 Notes and 2026 Notes which were issued in June 2020 and
March 2021, respectively. During 2021, the 2025 Notes were outstanding for the
full year compared to seven months in 2020 resulting in a higher interest
expense. This was offset by a decrease in effective interest due to the adoption
of ASU 2020-06.

Loss on extinguishment of debt

In March 2021, we repaid in full the outstanding indebtedness under our May 2020
credit agreement by making payments of $125.0 million of principal, a $18.2
million make-whole premium, $9.0 million payment in kind interest and $1.0
million of accrued interest.

                                          Year Ended December 31,                   Change
                                         2021                       2020         $           %
                                                (in thousands, except percentages)
Loss on debt extinguishment       $        49,977                  $ -       $ 49,977        100%
Percentage of total net revenue                27   %                -  %


We recorded a loss on debt extinguishment of $50.0 million during the year ended
December 31, 2021. The loss primarily related to the write-off of unamortized
debt discount and issuance costs of $31.8 million and make-whole premiums of
$18.2 million. Unamortized debt discounts primarily related to 2,599,174 shares
of Class A common stock issued to the FP EB Aggregator, L.P. for a purchase
price of $0.01 per share. We accounted for these shares at fair value and
recorded $27.4 million as debt discount at issuance. The remaining unamortized
discounts and issuance costs relate to the cash costs incurred during the
issuance of the term loan.

Other income (expenses), net

Other income (expense), net consists primarily of interest income and foreign
exchange rate remeasurement gains and losses recorded from consolidating our
subsidiaries each period-end. The primary driver of our other income (expense),
net is fluctuation in the value of the U.S. dollar against the local currencies
of our foreign subsidiaries.

                                        Year Ended December 31,                 Change
                                       2021                  2020            $            %
                                               (in thousands, except percentages)
Other income (expense), net       $    (3,630)            $ (1,932)      $ (1,698)      (88) %
Percentage of total net revenue            (2)  %               (2) %


The increase in other expense during 2021 compared to 2020 was driven by foreign
currency rate measurement fluctuations. We recognized foreign currency rate
remeasurement losses during the year ended December 31, 2021, as a result of the
strengthening of the U.S. dollar compared to the currencies with which we
operate and process transactions.

Provision for income tax (benefit)

Income tax provision consists primarily of U.S. federal and state income taxes
and income taxes in certain foreign jurisdictions in which we conduct
business. The differences in the tax provision and benefit for the periods
presented and the U.S. federal statutory rate is primarily due to foreign taxes
in profitable jurisdictions and the recording of a full valuation allowance on
our deferred tax assets in certain jurisdictions including the United States.
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                                         Year Ended December 31,                   Change
                                        2021                     2020          $            %
                                                (in thousands, except percentages)
Income tax provision (benefit)    $      1,428                 $ (80)      $ 1,508        1885  %
Percentage of total net revenue              1   %                 -  %


The provision for income taxes increased by $1.5 million in 2021 compared to 2020 and was primarily due to the change in our jurisdictional allocation of taxable profit year over year.

Cash and capital resources

As of December 31, 2021, we had cash and cash equivalents of $634.4 million and
funds receivable of $18.2 million. Our cash and cash equivalents includes bank
deposits and money market funds held by financial institutions and is held for
working capital purposes. Our funds receivable represents cash-in-transit from
credit card processors that is received to our bank accounts within five
business days of the underlying ticket transaction. Collectively, our cash, cash
equivalents and funds receivable balances represent a mix of cash that belongs
to us and cash that is due to the creator. The amounts due to creators, which
was $285.2 million as of December 31, 2021, are captioned on our consolidated
balance sheets as accounts payable, creators. Although creator cash is legally
unrestricted, we do not utilize creator cash for our own financing or investing
activities as the amounts are payable to creators on a regular basis.

As of December 31, 2021, approximately 26% of our cash was held outside of the
United States, which was held primarily on behalf of, and to be remitted to,
creators and to fund our foreign operations. We do not expect to incur
significant taxes related to these amounts.

In March 2021, we completed a private offering of the 2026 Notes and received
aggregate net proceeds of $207.0 million after deducting the initial purchaser's
discounts and commissions and debt issuance costs of $5.7 million. In connection
with the offering of the 2026 Notes, we entered into capped call transactions
with certain financial institutions. We used $153.2 million of the proceeds from
this offering to repay in full the outstanding indebtedness under our May 2020
credit agreement and $18.5 million of the net proceeds from the offering to pay
the cost of the 2026 Capped Calls. We intend to use the remainder of the net
proceeds from the offering for general corporate purposes. See Note 10 to our
consolidated financial statements included elsewhere in this Annual Report on
Form 10-K for additional information about the 2026 Notes and 2026 Capped Calls.

Under our advance payout program, we pass proceeds from ticket sales to certain
creators prior to a subject event, subject to certain limitations. We paused
this program in March 2020 due to the COVID-19 pandemic. In the second quarter
of 2021, we relaunched advance payouts to paid creators who qualify and accept
our terms and conditions. As of December 31, 2021, advance payouts outstanding
was approximately $319.3 million including $79.5 million of advance payouts
issued since the third quarter of 2020, when we resumed the advance payout
program on a limited basis.

The terms of our standard merchant agreement obligate creators to repay us for
ticket sales advanced under our advance payment program. However, when we
provide advance payouts, we assume significant risk that the event may be
cancelled, postponed, fraudulent, materially not as described or removed from
our platform due to failure to comply with our terms of service or our merchant
agreement, which could result in significant chargebacks, refund requests and/or
disputes between attendees and creators. We may not be able to recover our
losses from these events, and COVID-19 has increased the likelihood that we will
not recover these losses. Such unrecoverable amounts could equal up to the value
of the ticket sales or amounts settled to the creator prior to the event that
has been postponed or cancelled or is otherwise disputed. We record estimates
for losses related to chargebacks and refunds of the face value of tickets based
on various factors, including the amounts paid and outstanding to creators in
conjunction with the advance payout program, the nature of future events, the
remaining time to event date, and actual chargeback and refund activity during
the current year. Due to the nature of the COVID-19 pandemic and the limited
amount of currently available data, there is a high degree of uncertainty around
these reserves, and our actual losses could be materially different from our
current estimates. We will adjust our recorded reserves in the future to reflect
our best estimates of future outcomes, and we may pay in cash a portion of, all
of, or a greater amount than the $21.4 million provision recorded as of
December 31, 2021.

We believe that our existing cash, including proceeds from the 2025 Notes and
2026 Notes, together with cash generated from operations, will be sufficient to
meet our anticipated cash needs for at least the next 12 months. However, our
liquidity assumptions may prove to be incorrect, and we could exhaust our
available financial resources sooner than we currently expect.


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Cash flow

Our treasury activities were as follows for the periods presented:

                                                                    Year Ended December 31,
                                                          2021               2020                2019
                                                                        (in thousands)
Net cash provided by (used in):
Operating activities                                  $  79,081          $ (156,892)         $  29,955
Investing activities                                     (2,533)            (12,657)           (13,598)
Financing activities                                     51,181             255,039            (32,817)

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

                                       $ 127,729          $  

85,490 ($16,460)


For a discussion and comparison of the years ended December 31, 2020 and 2019,
please refer to Part II, Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the 2020 Annual Report on Form
10-K filed with the SEC on March 1, 2021.

Comparison of completed exercises December 31, 2021 and 2020

Cash flow from operating activities

The net cash provided by operating activities for the year ended December 31,
2021 was $79.1 million, which primarily resulted from our net loss of $139.1
million, adjusted for noncash charges primarily consisting of $50.0 million loss
on debt extinguishment, $47.5 million stock-based compensation expense, $18.7
million depreciation and amortization, and $4.6 million noncash operating lease
expense. Additional cash was provided by changes in working capital consisting
of a $94.1 million increase in accounts payable to creators due to an increase
in paid ticket volume and $14.8 million other accrued liabilities, offset by
$18.3 million cash paid for refunds and chargebacks.

The net cash used in operating activities of $156.9 million for the year ended
December 31, 2020 was due primarily to a net loss of $224.7 million, adjusted
for noncash charges primarily consisting $61.0 million provision for chargebacks
and refunds, $40.2 million stock-based compensation expense, $22.6 million
depreciation and amortization, $10.2 million amortization of debt discount and
issuance costs, $6.8 million payment in kind interest, $17.6 million provision
for bad debt and creator advances, $12.3 million impairment charges relating to
creator advances and creator signing fees, and $8.6 million amortization of
creator signing fees. Additionally, cash was used in changes to working capital
consisting of a $116.7 million decrease in accounts payable to creators, $30.4
million cash paid for refunds and chargebacks, offset by $44.1 million cash from
funds receivable.

Cash flow from investing activities

The net cash used in investing activities of $2.5 million for the year ended
December 31, 2021 consisted of $1.5 million capitalized internal-use software
development costs and $1.0 million purchases of property and equipment.

The net cash used in investing activities of $12.7 million for the year ended
December 31, 2020 was due to $6.4 million acquisition of ToneDen in November
2020, $4.6 million capitalized software development costs and $1.7 million
purchases of property and equipment.

Cash flow from financing activities

The net cash provided by financing activities of $51.2 million during the year
ended December 31, 2021 was primarily due to $207.0 million proceeds from
issuing the 2026 Notes, net of issuance costs, and $18.5 million proceeds from
the exercise of stock options, offset by $143.2 million repayment of term loans
including prepayment premium, $18.5 million purchase of the 2026 Capped Calls in
connection with the issuance of the 2026 Notes and $13.7 million taxes paid
related to net share settlement of equity awards.

The net cash used in financing activities of $255.0 million during the year
ended December 31, 2020 was primarily due to $256.1 million proceeds from
issuing the Initial Term Loans and 2025 Notes, net of issuance costs, and $19.3
million proceeds from the exercise of stock options, partially offset by $15.6
million purchase of convertible notes capped calls in connection with the
issuance of the 2025 Notes and $5.5 million in taxes paid related to the net
share settlement of equity awards.
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Credit risk concentrations

As of December 31, 2021, one customer accounted for 11% of net accounts
receivables. As of December 31, 2020 there were no customers that represented
10% or more of our accounts receivable balance. There were no customers that
individually exceeded 10% of our net revenue during the years ended December 31,
2021 and 2020.

Contractual obligations and commitments

Our principal commitments consist of obligations under the 2025 Notes and 2026
Notes (including principal and coupon interest), operating leases for office
space, as well as non-cancellable purchase commitments. Refer to Note 11,
"Commitments and Contingent Liabilities", of the Notes to Consolidated Financial
Statements under Part II, Item 8 of this Annual Report on Form 10-K for more
details, including a table of our contractual obligations.

Significant Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America (GAAP).

Use of Estimates

In order to conform with GAAP, we are required to make certain estimates,
judgments and assumptions when preparing our consolidated financial statements.
These estimates, judgments and assumptions affect the reported assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenue and
expenses during the reported periods. These estimates include, but are not
limited to, the recoverability of creator signing fees and creator advances,
chargebacks and refunds due to cancelled or postponed events, certain
assumptions used in the valuation of equity awards, assumptions used in
determining the fair value of business combinations, the allowance for credit
losses, and indirect tax reserves. Due to the ongoing COVID-19 pandemic, there
is uncertainty and significant disruption in the global economy and financial
markets. We have had to make significant estimates in our consolidated financial
statements, specifically related to chargebacks and refunds reserves due to
cancelled or postponed events. We evaluate these estimates on an ongoing basis.
Actual results could differ from those estimates and such differences could be
material to our consolidated financial statements.

Chargeback and Refund Reserve

Critical estimates. The terms of our standard merchant agreement obligate
creators to reimburse attendees who are entitled to refunds. We record estimates
for refunds and chargebacks of our fees as contra-revenue. When we provide
advance payouts, we assume risk that the event may be cancelled, fraudulent, or
materially not as described, resulting in significant chargebacks and refund
requests. If the creator is insolvent or has spent the proceeds of the ticket
sales for event-related costs, we may not be able to recover our losses from
these events, and such unrecoverable amounts could equal the value of the
transaction or transactions settled to the creator prior to the event that is
disputed, plus any associated chargeback fees not assumed by the creator. We
record reserves for estimated advance payout losses as an operating expense
classified within sales, marketing and support.

Assumptions and judgment. Reserves are recorded based on our assessment of
various factors, including the amounts paid and outstanding to creators in
conjunction with the advance payout program, the nature of future events, the
remaining time to event date, macro-economic conditions and current events, and
actual chargeback and refund activity during the current year.

Impact if actual results differ from assumptions. The chargebacks and refunds
reserve was $21.4 million and $33.2 million which primarily includes reserve
balances for estimated advance payout losses of $18.5 million and $29.5 million
as of December 31, 2021 and 2020, respectively. The decrease in the reserve
balance during the year ended December 31, 2021 was the result of lower
estimated losses from the advance payout program and estimated future refunds of
fees, which were previously higher at the onset of the COVID-19 pandemic. Due to
the nature of the COVID-19 situation, the limited data on losses attributed to
COVID-19 impact across other industries, a high degree of uncertainty around the
assumptions noted above including the outcome of events that are currently
postponed or rescheduled and the remaining advance payouts balance, it is
possible that the reserve will not be sufficient and our actual losses could be
materially different from our current estimates. We will adjust our reserves in
the future to reflect our best estimates of future outcomes. We cannot predict
the outcome of or estimate the possible recovery or range of recovery from these
matters.
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Recovery of creator signing fees and creator advances

Critical estimates. We offer incentives such as creator signing fees and creator
advances, which are intended to increase ticket sales and revenue. Creator
signing fees are incentives that we offer and pay in order to secure exclusive
ticketing and payment processing rights with certain creators. Creator advances
are incentives that we offer, which provide the creator with funds in advance of
the event. These are subsequently recovered by withholding amounts due to us
from the sale of tickets for the event until the creator payment has been fully
recovered.

We record a reserve for creator signing fees and creator advances taking into
consideration the recoverability of outstanding balances and changing facts and
circumstances for each reporting period. Creator signing fees and creator
advances are presented net of reserves on the consolidated balance sheets and
were $3.4 million and $0.9 million respectively, as of December 31, 2021.

Assumptions and judgment. Reserves are recorded based on management's assessment
of various factors, including a creator's payment history, the rate and timing
of recovery for outstanding advances, recent ticket sales activity, the
frequency and size of historical and planned future events, and macro-economic
conditions and current events that may impact a creator's ability to generate
future ticket sales. As of December 31, 2021, reserves relating to creator
signing fees and creator advances were $8.7 million and $13.5 million,
respectively.

Impact if actual results differ from assumptions. Creator signing fees and
creator advances are presented net of reserves on the consolidated balance
sheets. In the event our reserve estimates differ from actuals, such amounts are
not expected to have a material effect on our financial condition, results of
operations or cash flows.

business combinations, Good will and intangible assets acquired

Critical estimates. We account for business acquisitions using the purchase
method of accounting, in accordance with which assets acquired and liabilities
assumed are recorded at their respective fair values at the acquisition date. We
allocate the fair value of purchase consideration to the tangible assets
acquired, liabilities assumed and intangible assets acquired based on their
estimated fair values. Goodwill represents the excess of the aggregate fair
value of the consideration transferred in a business combination over the fair
value of the assets acquired, net of liabilities assumed. Such valuations
require us to make significant estimates and assumptions, especially with
respect to intangible assets.

Acquired intangible assets, net consists of identifiable intangible assets such
as developed technology, customer relationships, and trade names resulting from
our acquisitions. Acquired intangible assets are recorded at fair value on the
date of acquisition and amortized over their estimated economic lives following
the pattern in which the economic benefits of the assets will be consumed, which
is straight-line. Acquired intangible assets are presented net of accumulated
amortization in the consolidated balance sheets. Goodwill is not amortized but
we evaluate goodwill impairment annually in the fourth quarter, or more
frequently if events or changes in circumstances indicate the goodwill may be
impaired.

We evaluate the recoverability of our acquired intangible assets for potential
impairment whenever events or circumstances indicate that the carrying amount of
such assets may not be recoverable. Recoverability of these assets is measured
by a comparison of the carrying amounts to the future undiscounted cash flows
the assets are expected to generate. If such review indicates that the carrying
amount of intangible assets is not recoverable, the carrying amount of such
assets is reduced to the fair value.

Assumptions and judgment. Significant estimates in valuing certain intangible
assets include, but are not limited to, future expected cash flows from acquired
users, acquired technology and trade names from a market participant
perspective, useful lives and discount rates. Significant judgment and estimates
are required in assessing impairment of long-lived assets, and goodwill
including identifying whether events or changes in circumstances require an
impairment assessment, estimating future cash flows, and determining appropriate
discount rates. There was no impairment loss recorded on goodwill and acquired
intangible assets for the years ended December 31, 2021 and 2020.

Impact if actual results differ from assumptions. As a result of the goodwill
impairment assessment, management concluded goodwill was not impaired as of
December 31, 2021 and does not believe that its reporting unit is at risk of
failing the impairment test since the fair value of the reporting unit
substantially exceeded the carrying value. Our estimates of fair value are based
upon assumptions believed to be reasonable, but which are inherently uncertain
and unpredictable and, as a result, actual results may differ from estimates.
Actual future operating results and the remaining economic lives of our
intangible assets could differ from the estimates used in assessing the
recoverability of these assets. These differences could result in impairment
charges, which could have a material adverse impact on our results of
operations.
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Stock-based compensation expense

Critical estimates. We estimate the fair value of stock options granted using
the Black-Scholes option pricing model. Determining the grant-date fair value of
options using the Black-Scholes option-pricing model requires management to make
assumptions and judgments. These estimates involve inherent uncertainties and,
if different assumptions had been used, stock-based compensation expense could
have been materially different from the amounts recorded. As we do not have
sufficient historical stock price information to meet the expected life of the
stock option grants, we use a blended volatility that includes our common stock
trading history and supplements the remaining historical information with the
trading history from the common stock of a set of comparable publicly-traded
companies. We will continue to apply this process until a sufficient amount of
historical information regarding the volatility of our stock price becomes
available. The expected term of stock options granted has been determined using
the simplified method, which uses the midpoint between the vesting date and the
contractual term.

Compensation expense is recognized over the vesting period of the applicable award on a straight-line basis. We estimate lapses to calculate stock-based compensation expense.

Assumptions and judgment. Refer to Note 12, "Stockholders' Equity", of our Notes
to our Consolidated Financial Statements included in Part II, Item 8 of this
Annual Report on Form 10-K for the range of assumptions used to estimate the
fair value of stock options granted to employees.

Impact if actual results differ from assumptions. Although we believe that our
estimates and judgments are reasonable, actual results may differ from these
estimates which could have a material adverse effect on our financial results.

Indirect tax reserves

Critical estimates. Eventbrite is subject to indirect taxes such as sales and
use, value-added tax, and goods and services tax in the U.S. and certain foreign
jurisdictions. The evaluation of our indirect tax reserves involves significant
judgment in the interpretation and application of GAAP and complex domestic and
international tax laws.

Assumptions and judgment. Reserves are adjusted considering changing facts and
circumstances, such as the closing of a tax examination or the refinement of an
estimate. We recognize losses from such reserves if it is estimable and probable
that our position would not be sustainable upon examination by the taxing
authorities.

Impact if actual results differ from assumptions. Although management believes
our reserves are reasonable, no assurance can be given that the final tax
outcome of these matters will not be different from that which is reflected in
our reserves. To the extent that the final tax outcome of these matters is
different than the amounts recorded, such differences could have a material
impact on our consolidated financial statements.

Recent accounting pronouncements

See Note 2, “Significant Accounting Policies,” in our Notes to our Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

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