ETSY
Etsy INC
NASDAQ
10-Q: Etsy Reports Mixed Q1 Results Amidst Macroeconomic Headwinds
Sentiment:
Quarterly Report
1 May 2024 6:19 PM
Etsy's first quarter results show a slight revenue increase but a decrease in gross merchandise sales, reflecting a challenging macroeconomic environment.
Worse than expected
The company's GMS declined year-over-year, indicating a slowdown in sales volume.
Net income decreased year-over-year, reflecting lower profitability.
Adjusted EBITDA decreased slightly year-over-year.
Summary
- Etsy's total revenue for the first quarter of 2024 was $646.0 million, a 0.8% increase compared to $640.9 million in the same period last year.
- Gross Merchandise Sales (GMS) decreased by 3.7% year-over-year to $3.0 billion, primarily driven by a decline in the Etsy marketplace GMS.
- The Etsy marketplace GMS per active buyer declined 3.5% year-over-year to $125.
- Net income for the quarter was $63.0 million, a decrease from $74.5 million in the first quarter of 2023.
- Adjusted EBITDA was $167.9 million, a slight decrease from $170.3 million in the prior year.
- The company had $1.0 billion in cash and short-term investments as of March 31, 2024.
- Approximately 45% of GMS came from transactions where either the buyer or seller, or both, were located outside of the United States.
Sentiment
Score: 5
Explanation: The document presents a mixed picture with some positive growth metrics offset by declines in key financial indicators. The overall tone is cautious due to the macroeconomic challenges and competitive landscape.
Positives
- Active sellers on the platform increased by 15% year-over-year, indicating continued growth in the seller base.
- Active buyers increased by 0.9% year-over-year, showing a slight growth in the customer base.
- Services revenue increased by 3.2% year-over-year, driven by growth in on-site advertising revenue.
- The company maintains a strong cash position with $1.0 billion in cash and short-term investments.
Negatives
- Gross Merchandise Sales (GMS) decreased by 3.7% year-over-year, indicating a slowdown in sales volume.
- Net income decreased by 15.5% year-over-year, reflecting lower profitability.
- Adjusted EBITDA decreased slightly by 1.4% year-over-year.
- Etsy marketplace GMS per active buyer declined 3.5% year-over-year, suggesting reduced spending per customer.
Risks
- The company's performance is subject to macroeconomic factors such as inflation, interest rates, and consumer spending patterns.
- The company faces intense competition from other online and offline retailers.
- The company's business is subject to risks related to technology disruptions, security breaches, and data privacy.
- The company's international expansion efforts may not be successful.
- The company may incur further impairment charges for goodwill and other long-lived assets.
- The company's ability to attract and retain a diverse group of employees is important to its success.
- The company is subject to various legal and regulatory risks, including intellectual property claims and tax obligations.
Future Outlook
The company's future performance is subject to macroeconomic conditions and its ability to execute its growth strategies, including attracting and retaining buyers and sellers.
Management Comments
- The company's strategy is focused around building a sustainable competitive advantage for the Etsy Marketplace, growing the Etsy marketplace in its six core geographies, and leveraging its marketplace expertise across its House of Brands.
- The company's investments in technology infrastructure, product development, marketing, trust and safety, member support, and helping sellers grow support its strategy.
Industry Context
The results reflect the broader challenges faced by e-commerce companies in the current macroeconomic environment, including reduced consumer spending and increased competition.
Comparison to Industry Standards
- Etsy's GMS decline is similar to other e-commerce platforms that have reported a slowdown in sales growth.
- Etsy's focus on unique and creative goods differentiates it from larger e-commerce marketplaces like Amazon and eBay.
- Etsy's adjusted EBITDA margin of 26.0% is comparable to other established e-commerce companies.
- The company's active buyer and seller growth rates are moderate compared to the rapid growth seen during the pandemic.
Stakeholder Impact
- Shareholders may be concerned about the decrease in GMS and net income.
- Sellers may be impacted by the slowdown in sales volume.
- Buyers may be affected by changes in the platform's offerings and policies.
- Employees may be impacted by the company's restructuring efforts and cost-reduction measures.
Next Steps
- The company plans to continue investing in technology infrastructure, product development, and marketing.
- The company will focus on growing the Etsy marketplace in its six core geographies.
- The company will leverage its marketplace expertise across its House of Brands.
Key Dates
- 2019-09-01: Date related to the 0.125% Convertible Senior Notes due 2026.
- 2019-09-03: Date related to the 0.125% Convertible Senior Notes due 2026.
- 2019-09-18: Date related to the 2019 Capped Call Transactions.
- 2020-08-19: Date related to the 2020 Capped Call Transactions.
- 2020-08-31: Date related to the 0.125% Convertible Senior Notes due 2027 and the 2020 Capped Call Transactions.
- 2021-06-03: Date related to the 0.25% Convertible Senior Notes due 2028.
- 2021-06-08: Date related to the 2021 Capped Call Transactions.
- 2023-03-24: Date the company entered into a $400 million senior secured revolving credit facility.
- 2023-08-10: Date of the sale of Elo7.
- 2024-03-31: End of the first quarter of 2024.
- 2024-04-26: Date of the number of shares of common stock outstanding.
- 2024-05-01: Date of the report.
Keywords
Etsy, e-commerce, marketplace, GMS, revenue, Adjusted EBITDA, active sellers, active buyers, financial results, online retail
ETSY
Etsy INC
NASDAQ
Sector: TBD
Filings with Classifications
Capital raise
16 June 2025 4:58 PM
Debt Offering Announcement
- Etsy completed a private offering of $700 million aggregate principal amount of 1.00% Convertible Senior Notes due 2030.
- The offering included the exercise in full of the initial purchasers' option to purchase an additional $50 million principal amount of notes.
- The notes were sold to qualified institutional buyers pursuant to Rule 144A.
- The estimated net proceeds from the offering are approximately $688.5 million.
- Approximately $150.0 million of the net proceeds were used to repurchase common stock.
- The remainder of the net proceeds will be used for general corporate purposes, including potential repayment or repurchase of existing debt.
Worse than expected
30 April 2025 8:16 AM
Quarterly Report (10-Q)
- The company reported a net loss compared to net income in the same quarter last year.
- Gross Merchandise Sales decreased year-over-year.
- Active sellers and buyers both decreased.
Worse than expected
28 April 2025 4:27 PM
Proxy Statement
- The document indicates that the company's top-line performance was disappointing and that consolidated GMS was down approximately 4%.
Worse than expected
19 February 2025 9:16 AM
Annual Results
- GMS for the Etsy marketplace declined 6% in 2024 compared to the e-commerce sector at large, which experienced growth.
Worse than expected
19 February 2025 7:01 AM
Earnings Release
- The company's GMS declined year-over-year, indicating weaker sales performance compared to the previous year.
Worse than expected
30 October 2024 6:06 PM
Quarterly Report
- The company's GMS decreased by 4.1%, indicating a decline in sales volume.
- Net income decreased by 34.7%, showing a significant drop in profitability.
- Active sellers and buyers both experienced a slight decrease, suggesting a potential slowdown in platform engagement.
Worse than expected
30 October 2024 4:07 PM
Quarterly Report
- The company's GMS declined year-over-year, indicating weaker sales performance than the previous year.
Worse than expected
31 July 2024 6:20 PM
Quarterly Report
- The company's GMS decreased year-over-year, indicating a slowdown in sales growth.
- Net income decreased by 14.4% year-over-year, reflecting a decline in profitability.
Worse than expected
1 May 2024 6:19 PM
Quarterly Report
- The company's GMS declined year-over-year, indicating a slowdown in sales volume.
- Net income decreased year-over-year, reflecting lower profitability.
- Adjusted EBITDA decreased slightly year-over-year.
Worse than expected
22 April 2024 4:11 PM
Proxy Statement
- The document states that Etsy's core marketplace has not significantly grown its gross merchandise sales (GMS) over the last two years.
- The document states that 2023 performance did not achieve the expectations set at the start of the year.
Worse than expected
21 February 2024 6:18 PM
Annual Report
- Etsy underperformed the broader e-commerce market in its core geographies in 2023, with a GMS decline of nearly 2% for the Etsy marketplace compared to 7% growth for the industry according to Euromonitor.
Worse than expected
21 February 2024 4:06 PM
Quarterly Report
- The company's GMS declined slightly year-over-year, indicating a slowdown in sales volume.
- Net income decreased by 24% year-over-year, primarily due to restructuring and exit costs.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.