Q1 2024 Eventbrite Inc Earnings Call

Participants

Katie Pickett; IR; Eventbrite, Inc.

Julia Hartz; Co-Founder and CEO; Eventbrite, Inc.

Lanny Baker; CFO; Eventbrite, Inc.

Youssef Squali; Analyst; Truist Securities Corp.

Justin Patterson; Analyst; KeyBanc Capital Markets, Inc.

Matt Farrell; Analyst; Piper Sandler Companies

Dae Lee; Analyst; JPMorgan Chase & Co.

Hamed Khorsand; Analyst; BWS Financial, Inc.

Presentation

Operator

Good afternoon, ladies and gentlemen. Welcome to Eventbrite first-quarter 2024 earnings call. At this time, all lines are in a listen only mode. Following the presentation, we'll conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Katie Pickett, Investor Relations. Please go ahead.

Katie Pickett

Good afternoon, and welcome to Eventbrite First Quarter 2024 earnings call. My name is Katie Pickett, Investor Relations. With us today are Julia Hartz, our Co-Founder and Chief Executive Officer; and Lanny Baker, our Chief Financial Officer. As a reminder, this conference call is being recorded and will be available for replay on Eventbrite Investor Relations website at investor dot eventbrite.com. Please also refer to our Investor Relations website to find our shareholder letter announcing our financial results, which was released prior to the call.
Before we get started, I would like to remind you that during today's call, we will be making forward-looking statements regarding future events and financial performance. We caution that such statements reflect our best judgment as of today May second, based on factors that are currently known to us and that actual future events or results could differ materially due to several factors, many of which are beyond our control. For a more detailed discussion of the risks and uncertainties affecting our future results. We refer you to this section titled Forward-Looking Statements in our shareholder letter and our filings with the SEC. We undertake no obligation to update any forward-looking statements made during the call to reflect events or circumstances after today or to reflect new information or the occurrence of an unanticipated events, except as required by law.
During this call, we'll present adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and have limitations as an analytical tool you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP, a reconciliation to the most directly comparable GAAP financial measure is available in our shareholder letter. We encourage you to read our shareholder letter, which contains important information about GAAP and non-GAAP results. And with that, I'll now turn the call over to Julia.

Julia Hartz

Thank you, Katie, and welcome, everyone, to our first quarter call. We've been focused this quarter on executing our strategic transformation toward becoming a consumer marketplace for live events and I'm pleased to say that we've made great progress. We strongly believe that adopting our two-sided marketplace strategy enhances the value proposition we offer to our customers and positions us well to deliver sustainable financial returns in the long term.
I want to hit on some of our financial headlines first and then talk about our product road map progress and customer feedback. Lanny will then fill in the rest of our financial performance and talk about the outlook. First, revenue came in toward the higher end of the range at $86.3 million marketplace revenue represented 13% of total revenue, up from just 3% a year ago. Revenue per paid ticket was $4.7, which is up 21% compared to Q1 2023. Operating expenses declined from Q4 into Q1, and adjusted EBITDA margin was 12% for the quarter. Paid ticket volume was $21.2 million 8% below year ago, consistent with our expectations, we have since seen improved pay ticket volume comparisons as we start Q2 compared to Q1, led by higher value creators and larger events accelerating paid ticket growth is our number one operating priority.
We discussed in our last call the softness in paid ticket volume that we observed as we transition to our new two-sided marketplace model, and I want to reiterate them here before I speak to the actions we've taken to improve the growth trajectory that pay ticket headwinds are caused by two main factors. First, we need higher visibility events that bring more consumers into the marketplace. And second, we introduced new pricing and packaging to reflect our enhanced marketing and demand-generation capabilities, which had near term negative impact on acquisition and retention of smaller customers. Here's where we have been focusing to successfully complete the transition cycle and drive greater growth in volume. First, we've increased the size of our sales team and improved productivity within the team using targeted consumer demand data to define our target customers, the aggregate value of new sales-driven bookings in Q1 2024 was up more than 80% from Q1 2023.
We added approximately $2 million annual tickets in new large event creators during Q1, most of which are already active and on sale in the Eventbrite marketplace. These high-value events, which include well-known local venues, music and comedy shows, destination events and food and drink festivals are great distribution drivers as they draw large audiences of consumers to the marketplace for re-engagement to maximize our sales investment. We're closely managing sales productivity, deal economics, bookings to sales lagged velocity and the effectiveness of our marketplace promotional efforts through our own unique marketing strategy and product-led growth capabilities like our Creator marketing tools and Eventbrite.
Second, on pricing and packaging, breeders have adopted the monthly subscription plan at a faster rate than pay per diem pricing, which combined with their direct feedback, has given us a strong signal on how we can simplify the toy set and leaned more into the subscription pathway by offering free trialing annual discounts and promotional benefits for things like Eventbrite. In response to these changes and clearer communication around the plans, subscribing creators increased by 40% across the first quarter. Further at the funnel, we're improving our self sign-on experience to make onboarding easier and friction-free.
This means a cleaner UX, a more effective product tour and better experiences for logged-out users. And those on mobile devices were reinforcing our commitment to streamlining of that publishing and ticket sales, which has always been an advantage of Eventbrite during the first quarter, we reduced the time it takes most creators to sign up for the first time by 45% and increased first event conversion. In addition to these transitions were focusing on creator satisfaction and listening carefully to their feedback. For instance, we introduced instant payouts and tap to pay in Q1 to give creators faster access to their money and greater convenience to support out-the-door ticket sales. We also delivered a new creator dashboard that provides the reporting clarity they want. Creators have also asked for greater support and expert guidance and we responded by expanding customer support and account management.
These action plans are the primary levers that position us to reaccelerate paid ticket volume as we move through 2024 but we haven't taken our eye off the longer-term strategy of how we build our marketplace at scale. Our creators tell us their top need is to connect with their community and convert that community into a growing number of event goers. In the first quarter, we brought $28 million ticket buyers together with 345,000 creators issuing $66 million tickets across a wide variety of $1.4 million events worldwide of $850 million in gross ticket sales was transacted in the Eventbrite marketplace in the quarter, approximately half of the tickets sold in our marketplace were driven by Eventbrite, which was a record high for us and one that confirms the strength of our strategy. Eventbrite ads is a great example of our unique ability to impact and help drive demand. A record number of creators promoted their events via Eventbrite ads in the quarter as we improved ad targeting and performance to deliver a lower cost per click for advertisers.
We significantly broadened availability with the launch in 43 new cities worldwide and introduced new incentives to drive creator trials of Eventbrite ads on the consumer side, more than goers are looking to the Eventbrite website and our mobile app to search shop and find things to do average monthly active users across our site and app rose to $85 million in the first quarter, with mobile app users up 15% and mobile purchases up 35% in the quarter. Our consumer app is the stickiest and highest conversion experience and the place most people turn to to get their tickets. We see an opportunity to use the app to drive loyalty and repeat purchase behavior among our target consumers.
And we plan to invest here further in 2020 for another product surfaces were utilizing generative AI to remove friction and creating an event and enhanced coffee and imagery to drive greater sell through when using our marketing tools and demand capabilities through our AI event creation tools, roughly half of new creators have been able to publish their events and a third less time while generating more ticket sales in event discovery, we've deployed a high-powered trending tags to identify trending event themes in real time locally and generate unique editorial event collections, which offers a hyper-local approach at scale across top markets and categories.
We're encouraged by our progress in executing our marketplace strategy because it effectively responds to creators, event marketing needs, Diversa's our revenue streams and enhances our unit economics and profit margins. We're working through some natural friction as we execute this transition, and we are hyper focused on reaccelerating paid ticket growth this year. Thank you for your support, and I look forward to updating you as the year progresses. I'll now turn the call over to Lanny for a deeper review of our financial results and our outlook later.

Lanny Baker

Thank you, Julia. First quarter revenue of $86.3 million was up 11% year over year, propelled by strong growth in Marketplace revenue, including organizer fees and advertising. Revenue from organizer fees, which were rolled out broadly in Q3 of last year, totaled $8.5 million in the first quarter of 2024 compared to $6.6 million in the preceding quarter. An increase in pro plan subscribers drove the majority of that quarter to quarter revenue growth. Revenue from Eventbrite ads was $2.5 million in the first quarter, up nearly three times compared to a year ago as creator adoption more than doubled and spend per advertiser rose 23% year to year, improvements in relevance and targeting led to a lower cost per click and higher return on ad spending for creators, both on a year-to-year and sequential basis in the first quarter.
In the core ticketing business, paid creators were down 1%. Events per creator were stable and average tickets per event was 7% lower year to year. This led to the 8% decline in paid tickets in the first quarter. Meanwhile, average ticket price gained 3% year to year event rates, revenue per ticket increased 21% year to year to a record $4.7. And our revenue take rate was 10.1% compared to 8.6% a year ago as the marketplace strategy capitalizes on demand generation to increase unit economics and monetization, gross margins have shifted higher, reaching a new record of 71% in the first quarter. Gross margins also benefited from steps we've taken to reduce the fixed portions of cost of revenue.
Total operating expenses were $68.8 million in the first quarter including a small expense associated with our 2023 restructuring. We reduced total OpEx between Q4 of last year and Q1 of this year, with reductions in sales and marketing and general and administrative expenses, partially offset by an increase in product development as we invest in marketplace and consumer. Adjusted EBITDA was $10.4 million in the first quarter, a 12% adjusted EBITDA margin and net income was a loss of $4.5 million for the quarter.
Turning to the balance sheet, cash and cash equivalents rose to $580 million at the end of the first quarter, up from $489 million at the start of the quarter. Excluding ticket sale, proceeds payable to creators. The company's available liquidity was $378 million at the end of Q1 compared to 391,300,000.0 months earlier, we repurchased 2.6 million shares or 15 million of our stock during the first quarter. That's under the $100 million buyback program authorized by our Board in March of this year. Finally, we had $358 million in long-term debt outstanding at the end of Q1. Overall, a solid final financial foundation to support our operations and strategy.
Finally, we've updated our business outlook based on first quarter results and current information, we now anticipate revenue for the full year of 2024 to be within a range of 360 to $371 million at the midpoint of the updated and slightly narrower range. Our full year outlook equates to 12% revenue growth over 2023. For the second quarter of 2024, we anticipate that revenue will be within a range of $84 million to $87 million. Paid ticket volume is expected to be down year to year in the second quarter, although by a smaller percentage change than in the first quarter of 2024. For the full year, we expect paid ticket volume to be down slightly to up modestly from 2023 as comparisons become easier, we move beyond the initial marketplace changes and we execute on our product marketing and sales priorities.
We plan to continue to manage expenses tightly with a focus on improving paid tickets and executing the marketplace strategy. We anticipate adjusted EBITDA margins in the low to mid 10s for the full year 2024, which is consistent with the outlook shared earlier this year. In summary, our first quarter financial results were consistent with our expectations and we continue to make significant progress on our two-sided marketplace strategy. We believe we are stabilizing paid ticket trends, and we are listening to creators in order to drive ticket volume improvement as the year progresses.
We believe the gains we have made in Marketplace revenue, revenue per ticket and a higher take rate have fundamentally strengthened our business model and our balance sheet remains strong. We believe we are well positioned to execute the marketplace transition and unlock Eventbrite full potential in the live experiences economy. With that, I'll turn the call back to the operator.

Question and Answer Session

Operator

(Operator Instructions) Youssef Squali, Truist Securities.

Youssef Squali

Thank you very much, Julia. Hi, Lenny coal questions, obviously, thanks for the for all the color on the paid ticket sold. But can you maybe just talk about the competitive intensity today versus a year ago? What kind of gives you the confidence that what you're seeing with pay ticket growth is entirely kind of some internal due to internal changes and then maybe not necessarily to other market dynamics and then can you maybe quantify what you've seen so far in April in terms of paid tickets sold?

Julia Hartz

Thanks, Youssef. Great to hear from you. So we're competing in a very dynamic and fragmented market. And that hasn't changed as we've moved into this year. We're really choosing to shift the points of competition from a commoditized ticketing platform to a driver of demand generation because that it's what our creators tell us as their number one priority. And because at scale, we think we have an advantage here. We have far greater scale than our niche competitors. We bring $20 million ticket buyers with together with her 345,000 creators in the quarter alone, then saw 66 million tickets to 1.4 million events. That is something that we're proud of and building on, but not any reason for us to remain complacent. So while we believe our ubiquity across the event categories and geographies in our markets is unmatched. In this in this mid-market segment, we remain healthily paranoid about which new technologies are coming into the market, which consumer experiences are better than Eventbrite. We use those as points of I've aspiration and inspiration for us to build a better experience and disrupt ourselves.
One of the reasons why we're focused so heavily on consumer engagement is not because it's easy. But because we've built scale in driving demand at over half of it, sorry, roughly half the ticket flowing through our are that bright driven channels. And we think that with that scale and that command of how to drive tickets to consumers, we can actually build a much stickier experience for consumers and drive repeat consumer behavior. So I would say the competition will always be a factor in our market, particularly because it's so fragmented, but we aren't seeing one player come up and disrupt our market position, and we will continue to be looking around, particularly in places where we believe companies could be driving demand for live events in our markets.

Lanny Baker

I'll talk about the your question, but the second quarter, we just started the quarter really, but we are seeing improved paid ticket trends relative to the first quarter. That's been led by higher value creators and larger events, as we said, bookings of new events through our sales channel, which typically goes after larger events, larger creators and things that our consumers are telling to us. They really want to see in our marketplace. We're up 80% year to year in the first quarter that builds on strong sales driven booking momentum that we established at the tail end of 2023. Those events are starting to populate the calendar now, and they're more out more on the upcoming months as well.
So that's that's one thing we're starting to see at the very top of the Self-Sign On funnel, we are seeing some early signs of improvement too early to impact pay ticket volume in any consequential way. However, the plan that we have that we're focused on to drive growth even later into the year, which is address adjusting pricing and packaging, focusing on those high value creators and large events that are so important to the flywheel and the value of our of our marketplace and then enhancing the value proposition of the Eventbrite marketplace, whether that's about print ads or marketing tools or the distribution that we have to consumers ask for product features, more service and support and all those things we are putting in in the marketplace right now, we are seeing some impact on greater satisfaction already. And that's that gives us confidence about where we'll be later on this year.

Youssef Squali

Okay. Thank you both.

Operator

Justin Patterson, KeyBanc.

Justin Patterson

Great, thanks. Good afternoon. Could you extend some more just on how you're attracting these larger creators and how the cost of service might be different from the smaller creators. So that's the first question. And then second, you focused quite a bit on the mobile app, both in the letter in the prepared remarks. But could you talk about just some of the steps you're taking this year to really improve that and just get even more consumers transacting through through that piece of the platform. Thank you.

Lanny Baker

Sure. I'll talk first about the larger accounts, and then I'll let Julia talk about our plans on the mobile app. The our business is one in which there are there are there's this head inventory of what we call strategic inventory. It's very large, high-value events and creators who put on some of the most popular events in the local marketplaces. And that's a very clear focus area of us where, of course, we're using the consumer data from our app and from our web product to determine what people are most interested in seeing in the marketplace. And then we're turning our sales force loose on acquiring those customers, our value proposition to them centers around the great performance of the Eventbrite platform.
The full-featured nature our reputation in the marketplace, we're able to offer pretty competitive financial terms because we also have this long tail of smaller creators where the customer acquisition cost is very, very low and that gives us a lot of margin to play with as we go after some of those larger creators who are often more demanding and the value proposition for them is really about the product and increasingly about demand-generation. These creators are some of the earliest and largest up takers of Eventbrite ads and end users of our marketing tools. And so our value proposition for them I think is differentiated in the marketplace, and we're really excited about the progress we've made. We are seeing customers in that cohort who left us a couple of years ago, starting to come back to the Eventbrite platform that they know and trust and feel like we've got some strong momentum in that part of marketplace.

Julia Hartz

And then on the mobile app side just and we have seen mobile app users up 15% in the quarter and mobile purchases up 35% in the quarter, which underpins the theme of the mobile app being a more highly engaged and quite a good, sticky eye's surface area for our consumers. We're taking currently concerted action into driving more consumers and ticket buyers to the app in order to access their tickets as well as being able to be served to personalize content and browse for new event trends, new events to attend our future plans this year include redesigning that experience to more closely align with our vision around where we want consumers to start considering Eventbrite as a place to go to seek relevance and to be able to connect with more experiences around them.
We have a core customer that we're building for, who is more likely the person that is inviting others to events. So we want to make sure that their social graph is something that we can help them connect to as well as create friction-free ways for them to discover experiences and be able to bring other people along with them, so you'll see more of that as we continue on this year. But right now, we're really focused on getting the basics right and making sure that more of the consumers, we had 85 million monthly actives in total on Eventbrite. More and more of them are coming through the app, downloading that app and using it as their wallet for access into an event.

Justin Patterson

Thank you.

Operator

Matt Farrell, Piper Sandler.

Matt Farrell

Thanks for letting me ask a question my first one is on take rate trends from here and take rate was flat sequentially quarter over quarter after several quarters of big moves higher. Are there any how should we be thinking about the expansion I guess, throughout the rest of 2024? And are there any potential headwinds to take rate moving forward? Just as you look to regain and some of the creators that have left the platform and maybe a larger focus on the larger creators here thinks that the take rate over the last couple of years has has moved up.

Julia Hartz

It was in the high sevens a couple of years ago was in the 8% now were broken through the 10% barrier. And I'd say the first stage of that improvement has really come from deep work that we did a couple of years ago on just the basic performance of the platform, the product market fit for frequent creators who really are the highest value creators in the marketplace. And that allows us to to improve better, better product market fit means better pricing and better take rates. The second stage has been really reflecting just the earliest opening of our marketplace strategy. And the marketplace strategy revolves around not just being a ticketing platform, but really being a marketing distribution, demand-generation partner for creators.
When we look at creators budgets, they spend more money on marketing their events and on driving customers and building their communities and bringing in new customers bringing back loyal event attendees. And we believe with our consumer scale with our technological capabilities with our brand recognition on the consumer side, that's a space that Eventbrite can move into and really play a very differentiated and very, very big role. So the growth that you've seen over the last, I'll say, 12 months, 18 months has come from the earliest stages of that demand generation marketplace strategy.
And from here, I think things like the growth of Eventbrite adds, the strength of our distribution, our ability to drive audience or the pathway to moving the take rate higher in the long term. There aren't any major headwinds as you asked about for the rest of this year. I think we'll stay in this range and the growth of our demand-generation monetization of Eventbrite ads will determine where the take rate goes in the long term.

Matt Farrell

And then maybe just touching on the free creators. Some, you know, it seems like based on some of the metrics you put in the press release that the free creators have left at a greater pace than the paid creators. And so what are some of the things you're looking to do to bring these creators back to the platform. And as we think about the ability to drive consumers to the platform and the dynamics around the advertising business. If these free creators don't come back, is there a risk that we see a slowdown in the ads business and, you know, over the next call it a couple of quarters or mid term from a growth perspective?

Julia Hartz

Thanks. Sure. What you're right, the free creators have had a greater reaction to the introduction of pricing and packaging on has and let's be clear for a free creator of an event smaller than 25 attendees, Eventbrite remains free for free and for those creators of larger events. On the free side, there is a modest per event fee between 25 and 100 tickets to the $10 fee to list that have entered the market place. Most free creators have some economic activity going on at that event, whether it's merchandise sales or its memberships or sponsorship.
And that listing fee has been accepted by the majority of free caters. There are other free creators who are sensitive to it and it has had a greater impact. You can imagine a free creators never paid Eventbrite before, and we're now asking them to a paid event creator sees money flowing through Eventbrite all the time. And it's been and easier for us to introduce that just charging for something on the already commercial paid customers and the disruption that we've seen we're taking steps to do things like offer discounted rates for nonprofit organizations, seasonal promotions for a year or two, where we can provide discounts to bring people onto the marketplace.
You have a good question though about the role of that free traffic and those free tickets. It's an important part of our franchise, and we continue to do almost twice as many free tickets as we do pay tickets. I think when we look at overall MAUs up a couple of million year over year, we look at the mobile app users growing by a mid 10s percentage. And we continue to feel like and certainly as we add those high value creators that they bring so much attractive draw gravity to our marketplace. We feel like we're in a really good position to continue to drive the users that we need to support our demand generation strategy. And there are big opportunities to drive repeat purchase activity amongst the OEMs, tens of millions of people on our side, we know are ticket buyers and there is a frequency opportunity there.
So as we turn and you ask about how that connects to Eventbrite adds. While we're still at a relatively early stage of Eventbrite ads, the penetration of the advertiser base is strong and growing, but still emerging on the coverage of Eventbrite across all of our markets is still being built and being expanded out the surfaces on which you can advertise the different pricing options. So so there are a lot of levers on Eventbrite adds. I think we remain in a good position on overall traffic, and we do regard that free franchise of ours is a very valuable part of the business, and we're taking steps to move that move through the transition of having introduced a relatively small lifting speed, but that fee stands on top of the value we're delivering are all those creators.

Operator

[Ryan], B. Riley Securities.

This is Ryan on for Naved. So we are wondering on the build-out of the new sales team when this should begin having an impact on career growth? And then also on the pace of future share buybacks and where the stacks and priority of cash usage.

Julia Hartz

Sure. And I think that the buildup of the sales force is more likely to have an influence on paid ticket volume. The average across our entire market. The average is about 50 attendees at an event, but the sales force is going after creators who are doing 500 person events, 5,000 person events and even larger. So on the play with the sales force is really about high value creators rather than sheer volume of creators. The volume play we have is the fact that 98% plus of our creators Self-Sign On. And the majority of that is brought in organically by the sort of distribution and the ubiquity of the Eventbrite platform.
So I wouldn't look for the investment in sales and customer manage account management, customer success to drive volume of customers as much as high value customers who bring in the ticket volume. And on your second question about the share repurchase. We repurchased about 2.5 million shares during the quarter. That program was announced and sort of put in place in March since the end of the quarter, we've repurchased another 2.5 million shares, bringing us to a little bit more than 5 million shares in about $30 million deployed cumulatively since the start of the program. It's a $100 million program.
And our purpose is to manage our balance sheet to maintain flexibility and stability to support our our strategy and our operations while also taking advantage of the liquidity that we have to return some capital to shareholders to accrete ownership in the Company at this sort of moment of transition in the business where we think the company is becoming more valuable. And and we'll update you in the future on future plans there.

Operator

Dae Lee, JPMorgan.

Dae Lee

Great. Thanks for taking my question. Back to the first one, I mean, it sounds like you guys have enough engagement on the platform for now, but I assume becoming a market-facing consumer engagement is to continue to grow. So could you remind us what your strategy is today and those that need to fall going forward? And I have a follow-up.

Julia Hartz

Absolutely. So yeah, it was kind of hard to hear you, but I think you're asking about our consumer engagement strategy. Yes, Tom, I think what is it today and does that need to evolve going for? Sure, absolutely. Because we think about the intelligence we've gathered and data we have in terms of what consumers want to go to, we're taking a category by category market by market approach.
So I would I would describe our current strategy as being more granular granular today than it has been in the past with an increasing velocity of feedback loops and also ingesting and being able to process through things like generative AI, important information that can allow us to engage more consumers programmatically what I mean by that just to put it more simply in Q1 terms is that we rolled out an ability to ingest the data of searches and inquiries on the consumer side and be able to auto tag events and create collections that then get when back out for consumer engagement in a curated discovery, we find that consumers are coming to Eventbrite searching for something to do that's most likely aligned with their interests.
So we've also rolled out a new feature in our consumer app that allows you to search for events based on mood or vibe and we're using those contextual tags to be able to build out new collections that then we can promote through our SEO channels. So we're thinking about how we filter to the top the most relevant events for consumers based on their search parameters. But we're also taking advantage of the data that we have in terms of what they're looking for to drive targeted acquisition, meaning we're feeding that data into our sales team.
We're having them go after and most important consumer popular events in the categories that we know that matter in the markets that we care about were really feeding that into our performance marketing strategy in and our SEO strategy and really driving that Self-Sign On growth through a more targeted approach in the future as we build out more capability and engagement in things like our consumer app surface area, we're going to be looking at how we can lean more heavily on social and network effects to drive more of that increased engagement. And that will be measured by unit frequency of consumer visits and tickets purchased through consumer.
So if I step all the way back and think about our strategy over the next three years. It's really two and mass, the amount of intelligence on consumers that we have on the creators that are serving them and be able to drive better demand generation and relevance in that consumer population to really build out the second, the two-sided marketplace.

Lanny Baker

Yes, I would just add to that, that one of the I think occasionally sort of under-recognized attributes of our business is that 50% of the ticket sales in the marketplace are brought in by the creators marketing by the shows that they are putting on by the events that they're putting on by the by the franchises that they have, 50% of ticket buyers are coming in. And I guess you could look at that as almost from a consumer side, half of our consumer acquisition is has a negative customer acquisition costs because we're generating revenue on each one of those customer opportunities introduction opportunities.
That's particularly true with the large high value creators I was talking about a moment ago and then our our job to be done then is well we've been introduced to these events going consumers and to build a franchise that is the place they come back to for that, we can bring them back to their next experience and to recirculate and reengage that that demand. So there's an interesting dynamic in our marketplace, and that is that it's the presence of consumers that can draw in the creators and when the creators come in, they bring more consumers in.
And those in those incremental consumers become potential ticket buyers for everybody else and you get the flywheel effect. And so I think that's really central to our where we are today and where we will be in the future in terms of our consumer strategy.

Dae Lee

That's very helpful. And then I guess a follow-up for you, Larry, for your gross margins. It's kind of been at or above your long-term target for two quarters now. So just curious if there's any updated thoughts on how gross margins should be trending going forward?

Julia Hartz

We haven't updated long-term target, but as we said, as the as we've now surpassed 10% of revenue, 13% in this quarter coming from marketplace, and we take some steps to manage the more fixed elements within cost of revenue. We think we have shifted the gross margins of the business structurally higher, and it's it's exciting to see because just a few years ago, we were in the low 60s. We've made a tremendous amount of progress. And I think as we look across the course of this year. The level that we've been at is probably the right place to expect for for coming quarters. That's what we're planning for. But I think looping back to one of the earlier questions about the take rate it the opportunity to drive the take rate higher. The gross margins higher in the long term really is about capitalizing on the marketplace and demand generation proposition.

Dae Lee

Okay. Thank you.

Operator

Hamed Khorsand, BWS Financial.

Hamed Khorsand

So first off, could you just talk about that a little bit more. The good stats about the new paid creators you're adding. Are you added in Q1? Are they you're doing more than one event? What's the traction you're getting with them well.

Julia Hartz

So we added about 92,000 new creators during the first quarter and that when you look at a number that that's big that big, it's going to match pretty well the overall nature just by the law of large numbers of our creator base. So I don't think there's been any big change in terms of the size or scale. I think that one place from a where we've picked up momentum over the last several quarters as amongst the larger high value creators who do the larger events, we've been talking about and those are we have many of those on our platform.
The slight majority of them come through sales. A surprisingly large number of them come as Self-Sign On customers even in that large cohort. And that's an area where we've really made some progress.

Hamed Khorsand

And what are you seeing as far as the actual consumers on the marketplace who are they repeating purchases this year? How are they reacting to the higher ticket fees?

Julia Hartz

Sure. So the ticket fees that we changed on the consumer side were at the beginning of last year where we made a modest price increase to the overall Eventbrite ticket fee, it averaged about $0.5 per ticket. That was fairly modest and it was absorbed well by consumers about 80% of the ticket fees are paid for by consumers. The other 20% of the time it's absorbed by the creator. And so it really is a consumer facing price, whereas the marketplace fee that we've introduced in late 2023 is solely on the creator side.
In terms of consumer behavior, not much has shifted over the past quarter or so we're seeing about the same volume of tickets for consumers remained quite steady, and we're seeing the categories that are wanting to attend also remain quite steady. We have strong growth in music, performing arts, food and drink and also business events as people are getting together more and more to network and to still build into, you know, come together for company events and we see sort of new trending events.
All of the time we're seeing certainly sort of tend to coming in terms of dating events and people planning to meet their significant other through events, but nothing structurally has shifted from the consumer side and their buying behavior has remained quite consistent.

Hamed Khorsand

Great. Thank you.

Operator

Youssef Squali, Truist Securities.

Youssef Squali

So hey, thanks for taking the follow on. Actually. One is really just clarification. And then the follow-up is real question. So Lanny, can you just go over what you said in terms of your expectation for paid ticket volume growth at later in the year?
I think you made some commentary about the year. And then on the Marketplace revenues, obviously, I think the traction you guys have shown has been pretty impressive. And is there an upper limit to how high they can get to as percentage of revenues and doing them asking us to also see if there is any required investments that you guys need to do to scale that business beyond, say, in the mid 10s that it's running already at? Thank you.

Julia Hartz

Sure. But whatever we said about paid ticket volume is that for the year we expect paid ticket volume to be down slightly to up modestly for the full year versus the full year 2023. In the second quarter, we expect paid ticket volume to be down year to year, though, at a lower rate than it was in the first quarter, the first quarter being down 8% year over year. And hopefully that gives you some clarification. Yes, I think yes, on the other marketplace revenue.
And we are wondering one of the things that we look at is the percentage of ticket volume that was advertised in our marketplace and on were two times where we were a year ago in terms of that penetration or coverage or engagement with the advertising product, it's a low double digit, high single digit, low double digit penetration right now on. But we think we think ultimately, there's opportunity for a vast majority, the majority of creators in the marketplace to participate in about right ads.
And right now on amongst the creators who are participating in Eventbrite ads, it represents a 20% plus increase in the per creator economics or per event economics. So there really are sort of our two main vectors there, which are coverage of the addressable events with relevant advertising opportunities and then the performance of that advertising drawing more spending into our marketplace and giving a relatively greater lift. So the economics we would otherwise say.

Youssef Squali

Okay, that's helpful. But just about anything else you asked about divestment.

Julia Hartz

Yes, we have not. But yes, there's required investment and there's required investment in everything that we do. But we are being purposeful about when we open up big new opportunities like consumer like ads and also turning back to the base of the business and say what can we do more efficiently? And you saw us take steps there last year to do that, really price up some investment money that's been reallocated and reapplied in other directions. So yes, we'll continue to fund that investment. I think it will manage that within a reasonable overall envelope that fits with our long term profit margin targets Okay.

Justin Patterson

Thank you.

Operator

There are no more questions at this time. Ladies and gentlemen, that concludes the question and answer session for today. The conference has now ended. Thank you all for joining. You may all disconnect.