StubHub Holdings, Inc.STUB
StubHub Holdings, Inc. Fair Value Disclosure
FAIR VALUE MEASUREMENTS
The Company utilized the income approach to measure the fair value of Series I Redeemable Preferred Stock, Series N Redeemable Preferred Stock and Series O Redeemable Preferred Stock, with and without the bifurcated derivative, Series J Redeemable Preferred Stock and initially for Series M Redeemable Preferred Stock prior to the completion of the Company's IPO. The fair value of these liabilities was the present value of the expected future cash flows using a discount rate that approximates assumptions used by market participants for similar liabilities, adjusted to reflect inherent risks of the Company’s future cash flows. Significant changes in the discount rate would result in a significant decrease or increase in the fair value measurement.
The Company measures and records certain financial assets and liabilities, including money market funds, derivative interest rate contracts, Series I Redeemable Preferred Stock bifurcated derivative, Series J Redeemable Preferred Stock, Series M Redeemable Preferred Stock, Series N Redeemable Preferred Stock bifurcated derivative and Series O Redeemable Preferred Stock bifurcated derivative at fair value on a recurring basis. Changes in fair value for Series I Redeemable Preferred Stock bifurcated derivative, Series J Redeemable Preferred Stock, Series M Redeemable Preferred Stock, Series N Redeemable Preferred Stock bifurcated derivative and Series O Redeemable Preferred Stock bifurcated derivative are presented as a component of interest expense in the consolidated statements of operations. For the years ended December 31, 2025, 2024 and 2023, the changes in fair value of Series I Redeemable Preferred Stock bifurcated derivative, Series J Redeemable Preferred Stock, Series M Redeemable Preferred Stock, Series N Redeemable Preferred Stock bifurcated derivative and Series O Redeemable Preferred Stock bifurcated derivative, to the extent the redeemable preferred stock or bifurcated derivative was issued and outstanding, resulted in $15.8 million, $9.2 million and $5.6 million of , respectively.
The following are the categories of assets and liabilities measured at fair value on a recurring basis according to the fair value hierarchy (in thousands):
| December 31, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||
| Money market funds | $ | 268,854 | $ | — | $ | — | $ | 268,854 | |||||||||||||||
| Total | $ | 268,854 | $ | — | $ | — | $ | 268,854 | |||||||||||||||
| Other non-current assets | |||||||||||||||||||||||
| Derivative interest rate contracts | $ | — | $ | 34,356 | $ | — | $ | 34,356 | |||||||||||||||
| Total | $ | — | $ | 34,356 | $ | — | $ | 34,356 | |||||||||||||||
| Other current liabilities | |||||||||||||||||||||||
| Series M redeemable preferred stock | $ | — | $ | (17,894) | $ | — | $ | (17,894) | |||||||||||||||
| Total | $ | — | $ | (17,894) | $ | — | $ | (17,894) | |||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||||||||
| Money market funds | $ | 289,793 | $ | — | $ | — | $ | 289,793 | |||||||||||||||
| Total | $ | 289,793 | $ | — | $ | — | $ | 289,793 | |||||||||||||||
| Other non-current assets | |||||||||||||||||||||||
| Derivative interest rate contracts | $ | — | $ | 108,348 | $ | — | $ | 108,348 | |||||||||||||||
| Total | $ | — | $ | 108,348 | $ | — | $ | 108,348 | |||||||||||||||
| Other non-current liabilities | |||||||||||||||||||||||
| Series I redeemable preferred stock bifurcated derivative | $ | — | $ | — | $ | (2,990) | $ | (2,990) | |||||||||||||||
| Series M redeemable preferred stock | — | — | (26,646) | (26,646) | |||||||||||||||||||
| Series J redeemable preferred stock | — | — | (43,751) | (43,751) | |||||||||||||||||||
| Total | $ | — | $ | — | $ | (73,387) | $ | (73,387) | |||||||||||||||
Money market funds are included within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company’s derivative interest rate contracts are classified within Level 2 of the fair value hierarchy because they are valued using a market approach with inputs based on observable inputs other than quoted prices in active markets for identical or similar assets and liabilities. See Note 12—Interest Rate Derivatives for more information.
Series I Redeemable Preferred Stock bifurcated derivative, Series J Redeemable Preferred Stock, Series M Redeemable Preferred Stock, Series N Redeemable Preferred Stock bifurcated derivative and Series O Redeemable Preferred Stock bifurcated derivative were liabilities recognized at fair value. See Note 15—Redeemable Preferred Stock for more information. The Company’s Series I Redeemable Preferred Stock bifurcated derivative, Series J Redeemable Preferred Stock, Series N Redeemable Preferred Stock bifurcated derivative and Series O Redeemable Preferred Stock bifurcated derivative were classified within Level 3 of the fair value hierarchy because the fair value is estimated using significant unobservable inputs and upon the Qualified IPO, these liabilities were derecognized due to their conversion or reclassification to equity. Series M Redeemable Preferred Stock was initially classified within Level 3 of the fair value hierarchy but transferred to Level 2 of the fair value hierarchy upon the completion of the Company's IPO.
Long-term debt obligations are recorded at carrying value. The fair values of the 2024 Euro Term Loan and the 2024 USD Term Loan as of December 31, 2025 were €441.9 million and $992.5 million, respectively. The Company’s term loans are classified within Level 2 of the fair value hierarchy. See Note 10—Long-Term Debt Obligations for more information.
In the year ended December 31, 2025, the Series M Redeemable Preferred Stock transferred out of Level 3 and into Level 2 as it is valued using a market approach with inputs based on observable inputs other than quoted prices in active markets for identical or similar assets and liabilities upon the completion of the Company's IPO. There were no transfers of financial instruments into or out of Level 3 during the year ended December 31, 2024.
The following table summarizes the changes in Series I Redeemable Preferred Stock bifurcated derivative liability, Series J Redeemable Preferred Stock liability, Series M Redeemable Preferred Stock liability, Series N Redeemable Preferred Stock bifurcated derivative liability and Series O Redeemable Preferred Stock bifurcated derivative liability (in thousands):
| Series I Redeemable Preferred Stock Bifurcated Derivative | Series J Redeemable Preferred Stock | Series M Redeemable Preferred Stock | Series N Redeemable Preferred Stock Bifurcated Derivative | Series O Redeemable Preferred Stock Bifurcated Derivative | |||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | (2,719) | $ | (37,404) | $ | — | $ | — | $ | — | |||||||||||||||||||
Issuance of Series M redeemable preferred stock | — | — | (24,025) | — | — | ||||||||||||||||||||||||
| Changes in fair value | (271) | (6,347) | (2,621) | — | — | ||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | (2,990) | $ | (43,751) | $ | (26,646) | $ | — | $ | — | |||||||||||||||||||
| Fair value at issuance date | — | — | — | (188) | (895) | ||||||||||||||||||||||||
| Changes in fair value | (269) | (4,300) | 4,374 | (2,553) | (13,078) | ||||||||||||||||||||||||
| Conversion to equity | 3,259 | 48,051 | — | — | — | ||||||||||||||||||||||||
| Reclassification to equity | — | — | — | 2,741 | 13,973 | ||||||||||||||||||||||||
| Transfer out of Level 3 | — | — | 22,272 | — | — | ||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.