StubHub earns Moody’s upgrade to B2 as debt reduction efforts bear fruit

Investing.com -- Moody's Ratings has upgraded the Corporate Family Rating of StubHub Inc (NYSE:STUB), LLC to B2 from B3, signaling confidence in the live-event ticketing marketplace's ongoing balance-sheet deleveraging. The rating agency simultaneously raised the company's Probability of Default Rating and senior secured bank credit facility ratings to B2 while maintaining a stable outlook.

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The rating action underscores an aggressive debt-reduction strategy and a clear path toward operational margin recovery following a period of elevated growth spending. Moody's highlighted StubHub's voluntary repayment of $350 million in debt using excess cash flow since late 2025, alongside an additional $100 million paydown following the second quarter of 2026, as primary governance catalysts driving the upgrade.

Against that backdrop, credit metrics are expected to improve significantly after elevated performance marketing expenses and one-time costs severely compressed core profitability throughout 2024 and 2025. Although Moody's-adjusted leverage stood at a lofty 8.5x at the end of the second quarter, the agency projects leverage will fall to 5.7x by year-end 2026, bolstered by mid-to-high single-digit gross merchandise sales growth and margin expansion.

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StubHub's fundamental scale as a premier secondary ticketing destination continues to serve as the bedrock of its credit profile, offering critical marketplace liquidity across both buyers and sellers. That market presence provides management with the operational flexibility required to navigate intense industry competition, ongoing promotional pressures, and competitor product investments.

Liquidity remains a key strength for the live-events platform, backed by strong internal cash generation and a fully undrawn $565 million senior secured revolving credit facility maturing in 2030. Moody's anticipates the business will generate between $280 million and $300 million in annual free cash flow net of seller payables, eliminating any near-term reliance on revolver borrowings ahead of its 2030 term loan maturities.

The stable outlook reflects expectations that StubHub will sustain leverage below the 6x threshold while maintaining solid profitability, though Moody's cautioned that regulatory headwinds or market share loss could spark future downgrade pressure. Conversely, further upgrades remain contingent on the company maintaining debt-to-EBITDA below 5x alongside a formal, conservative financial policy.