StubHub reported a second-quarter net loss despite a 33% revenue increase. StubHub shares fell after the company's latest earnings report, extending deep losses year-to-date. StubHub posted a substantial increase in second-quarter revenue, thanks in large part to the World Cup.
It just wasn't able to turn a profit, and investors are selling the stock. StubHub (STUB) shares sank 14% in morning trading Thursday, a day after the ticket-reselling giant posted an unexpected loss even though the World Cup helped drive a better-than-expected revenue jump of 33%. The New York-based company posted a net loss attributable to stockholders of $40,000 in the second quarter.
Although that shrank from a loss of $75.9 million a year ago, analysts surveyed by Visible Alpha were expecting a profit of $43.7 million. Revenue of $573.1 million topped the Visible Alpha consensus estimate of $519.2 million, with founder and CEO Eric Baker saying Q2 "demonstrated strong demand for live events, highlighted by a record-setting World Cup." However, costs and expenses increased 37% to $553.6 million, and income from operations fell 22% to $19.5 million. Adjusted gross margin slipped to 82% from 83% a year ago.
"You can see that there were some higher direct costs related to the World Cup impacting gross margin," CFO Connie James said on the earnings call, according to an AlphaSense transcript. StubHub shares entered Thursday down 37% since the start of the year. Read the original article on Investopedia
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