StubHub reported a near-zero profit for Q2 2026, posting a loss of just $40K attributable to common stockholders, far below analyst expectations of 11 cents per share.
Revenue climbed 33%, driven largely by the FIFA World Cup. But total costs and expenses jumped 37% while operating income fell 29% year over year.
CFO Connie James said the company deliberately increased investment in customer experience around the World Cup.
She added that the tournament weighed on payment processing and fulfillment efficiency. "These costs are not representative of our underlying margin structure," James said.
World Cup complaints compound the damage
The revenue boost came with operational chaos. Fans reported fraudulent tickets and slow refunds, with more than 50 buyers saying they were denied entry or sent worse seats than purchased.
CEO Eric Baker pointed to FIFA's mobile-ticketing app as a complicating factor, calling it "a bespoke thing for this tournament, not anything that anybody would typically rely on."
Baker acknowledged a subset of buyers didn't get the experience they wanted but said the overwhelming majority had no problems.
Shares fell to their largest single-day drop since Nov. 2025 on Thursday. The stock is now down roughly 70% from its IPO price. BofA Securities downgraded the stock to Underperform.
Analyst Justin Post flagged a disconnect in StubHub's guidance. The company targets full-year gross merchandise sales of $10.1B to $10.3B, implying a slowdown in the second half. T
hat contrasts with strong demand signals from event promoters. Post suggested StubHub may be losing market share or seeing weaker resale demand.
Lobbying costs signal deeper regulatory risk
StubHub's regulatory troubles are piling up alongside its financial ones. The FTC reached a $10M penalty and consumer refund agreement with the company in April over "drip pricing," failing to show all-in fees upfront.
Separately, StubHub spent $2.6M on California lobbying between April and June, up from $825K the prior quarter.
That makes it the second-largest lobbying spender in the state, ahead of Chevron, Verizon, AT&T, and OpenAI. The spending targets AB 1720, a bill that would cap concert ticket resale prices at no more than 10% above face value.
Maine, Vermont, and Washington, D.C. have already passed price-cap laws, while Massachusetts is considering similar legislation. If California follows, StubHub’s fee-based business could take a hit. The company already lists price caps as a risk factor in its 10-K.
House Democrats also recently launched a probe into StubHub over CEO Eric Baker's ties to Andro Capital, a hedge fund that finances ticket brokers selling on the platform. A class-action suit followed, alleging fraudulent misrepresentation and violations of consumer protection laws.
With costs rising, the regulatory environment tightening, and the stock near record lows, StubHub's path to consistent profitability is getting harder to map.
