Event ticket exchange Vivid Seats (SEAT) has acquired Vegas.com in a mixed cash-and-stock deal which contains $151.2 million in cash and $88.8 million in Vivid’s Class-A common stock, according to the Wall Street Journal. The ticket resale company posted strong third-quarter earnings with $188 million in revenue, up 20% year-over-year.

Vivid Seats CEO Stan Chia joins Yahoo Finance to discuss the acquisition of Vegas.com and how the company is positioned for a strong 2024.

Chia comments on consumer spending habits during economic headwinds: "We are certainly cognitive of all of the other factors that are impacting consumers and how they think about discretionary spend. As it pertains to our category, we've continued to see resiliency and strength. When you think about our business, we look at indicators like average order size of the business as a good indicator of how much demand is outpacing supply and how much consumers are willing to pay."

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Video Transcript

SEANA SMITH: Vividseats is betting big on Las Vegas. Announcing it will acquire vegas.com in a cash and stock transaction valued at roughly $240 million. Now, the ticket platform raised its full-year guidance as well, saying, that the company's business is better positioned than ever.

We want to bring in Stan Chia, Vividseats CEO. He joins us now. Stan, it's good to see you. So let me pick up on that last point. Your business, you say, is better positioned than ever. Why?

STAN CHIA: Yeah. Hey, Seana. Thanks for having me on the show today. Look, we've been really excited as we've continued to see trends in the industry that I think maintain the category as one that consumers are looking to prioritize their spend on. And frankly, when we look at the platform-- and I'm privileged to have an amazing team that's been delivering. The differentiation that we've built into the platform with the industry's only loyalty program, best customer service as recognized by Newsweek, engagement platforms like our free-to-play game center or our real money daily fantasy app, Vivid Picks. We've just got so many things there to take advantage of consumer demand while offering them value.

And the acquisition of vegas.com to us is another catalyst that we think is transformative for the business. And as you see, that reflected in our outperformance this quarter. But perhaps more importantly, as we give preliminary guidance for next year, you can see that on a base of almost $4 billion this year. We're still going to grow top line double digits. And more importantly, we're seeing the flow through as we've preliminary guided to 26% EBITDA growth. Putting us almost at $200 million in EBITDA.

When we started the year, it's closer to $100 million.

BRAD SMITH: Stan, no doubt, this was the summer of the experience economy. People going to concerts, whether it be Taylor Swift, whether it be Beyonce. But at the end of the day, are you seeing any pullback or moderation, at least, in prices that consumers are willing to spend to go into these experiences? Or do you expect it to remain high?

STAN CHIA: It's hard to have a crystal ball on all of this. And we're certainly cognizant of all of the other factors that are impacting consumers and how they think about discretionary spend.

As it pertains to our category, we've continued to see resiliency and strength. When you think about our business, we look at indicators like average order size of the business as a good indicator of, how much demand is outpacing supply? And how much consumers are willing to pay?

And if you look at, I think, what we put out in our earnings presentation, on a year-over-year basis this quarter, we're about 10% up on average order size. When, historically, if you look at that [INAUDIBLE], it's more of a 3% to 4% number. So I think you're still seeing strength in the consumer in this category. And certainly, a desire to prioritize their spend there.

SEANA SMITH: Stan, do you think that could continue?

STAN CHIA: Yeah. Look, I think the category is, again, one where consumers see this. No doubt, it is discretionary spend. But there is the nature of the category, where there's just a FOMO-esque quality.

And I look at myself. I love Guns N' Roses. I took my kids to Guns N' Roses this year. We've talked about Taylor Swift, an amazing performer. I think everybody wants to see that.

So, again, not going to be immune to the impacts on the economy. But certainly, this is a category that I think consumers look to prioritize in a very differentiated one from the rest of the discretionary bucket.