StubHub Holdings, Inc. - Q2 2026 10-Q Summary
Business Context and Reporting Period
This Quarterly Report on Form 10-Q covers the period ended June 30, 2026. StubHub Holdings, Inc. operates a global ticketing marketplace for live events. The company completed its Initial Public Offering (IPO) in September 2025. As of June 30, 2026, the company reported strong growth in Gross Merchandise Sales (GMS) driven by market expansion and major events like the World Cup.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenue | $573.1 million | $430.3 million | $1,019.1 million | $827.9 million |
| Gross Margin | 82% | 83% | N/A | N/A |
| Net Income (Loss) | $14.6 million | $(53.8) million | $62.7 million | $(76.0) million |
| Adjusted EBITDA | $105.7 million | $54.3 million | $177.7 million | $102.3 million |
| Free Cash Flow | $309.7 million | $9.7 million | $600.2 million | $160.8 million |
| Cash & Equivalents | $1.69 billion (as of June 30, 2026) | |||
| Long-Term Debt | $1.42 billion (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 33.2% year-over-year for Q2 2026, driven by a 34% increase in GMS ($3.1 billion) and higher average transaction fee rates.
- Profitability: The company returned to profitability with $14.6 million in net income for Q2 2026, compared to a $53.8 million loss in the prior year period. This turnaround was aided by a significant reduction in foreign currency losses and interest expense.
- Expense Increases: General and Administrative (G&A) expenses surged 96.4% year-over-year, primarily due to a $59.2 million increase in stock-based compensation expense following the IPO. Sales and marketing expenses rose 16.5% due to increased advertising spend.
- Debt Reduction: The company aggressively reduced debt, making a $100 million principal payment on its 2024 USD Term Loan in May 2026 and another $100 million in July 2026 (subsequent event).
- Foreign Currency: Foreign currency gains improved significantly to $3.9 million in Q2 2026 from a $61.1 million loss in Q2 2025, largely due to favorable exchange rate movements on the Euro Term Loan.
Guidance, Outlook, and Risks
- Outlook: Management expects existing cash and cash equivalents to be sufficient to fund operations for at least the next 12 months. The company continues to invest in marketing and platform expansion.
- Material Weaknesses in Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, due to material weaknesses in the internal control environment, accounting policies, and IT general controls. These weaknesses previously led to restatements of prior years' financial statements.
- Litigation and Contingencies:
- Securities Class Action: A putative securities class action was filed in November 2025 alleging false statements in the IPO prospectus regarding market opportunity and financial metrics. The company filed a motion to dismiss in June 2026.
- Tax Matters: Significant accruals exist for indirect tax contingencies ($110.7 million total) and sales tax assessments ($68.0 million accrued for a specific state appeal).
- Regulatory: The company settled a matter with a U.S. regulator for $10.0 million regarding advertised pricing practices and is involved in proceedings with the D.C. Attorney General and Pennsylvania authorities.
Investor Verification Checklist
- Internal Control Remediation: Verify the progress of the remediation plan for material weaknesses in internal controls over financial reporting and IT general controls.
- Stock-Based Compensation: Assess the sustainability of G&A expenses given the $69 million stock-based compensation expense in Q2 2026, which is expected to continue vesting.
- Legal Reserves: Monitor the status of the securities class action and the outcome of the state sales tax appeal, which could materially impact future earnings.
- Debt Covenants: Confirm continued compliance with debt covenants, particularly the leverage ratio, as the company continues to pay down term loans.
- Preferred Stock Conversions: Note that Series M, N, and O preferred stock converted to Class A common stock in March 2026; verify the impact on diluted share counts and earnings per share.