ETSY
Etsy INC
NASDAQ
10-Q: Etsy Reports Q1 2025 Results; Announces Sale of Reverb
Sentiment:
Quarterly Report (10-Q)
30 April 2025 8:16 AM
Etsy's Q1 2025 results reveal a net loss and a plan to sell Reverb, its musical instrument marketplace, amidst a challenging economic environment.
Worse than expected
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.
Summary
- Etsy reported a net loss of $52.1 million for Q1 2025.
- Revenue increased slightly to $651.2 million, a 0.8% increase year-over-year.
- Gross Merchandise Sales (GMS) decreased by 6.5% to $2.8 billion.
- The company announced an agreement to sell Reverb for $105.0 million in cash.
- Adjusted EBITDA was $171.1 million, with an Adjusted EBITDA margin of 26.3%.
- A goodwill impairment charge of $101.7 million was recorded related to Reverb.
- Active sellers decreased to 8.1 million, and active buyers decreased to 94.8 million.
- The company had $867.7 million in cash and cash equivalents and short-term investments as of March 31, 2025.
- The company has $2.3 billion in outstanding convertible notes and access to a $400.0 million senior secured revolving credit facility.
Sentiment
Score: 5
Explanation: The sentiment is neutral to slightly negative. While revenue increased slightly, the net loss and declining active users raise concerns. The sale of Reverb could be seen as a positive strategic move, but also reflects challenges in that business.
Positives
- Revenue increased slightly by 0.8% year-over-year.
- The revenue take rate increased to 23.3% from 21.6%.
- Adjusted EBITDA remained strong at $171.1 million.
- The company is selling Reverb for $105.0 million, which will allow them to focus on their core business.
- The company has access to a $400.0 million senior secured revolving credit facility.
Negatives
- Etsy reported a net loss of $52.1 million.
- GMS decreased by 6.5% year-over-year.
- Active sellers and buyers both decreased.
- A significant goodwill impairment charge of $101.7 million was recorded related to Reverb.
- Operating expenses increased by 23.2%.
Risks
- The company faces intense competition in the e-commerce marketplace.
- Fluctuations in quarterly operating results can cause stock price volatility.
- Failure to attract and retain active buyers and sellers could harm financial performance.
- The company is subject to risks related to environmental, social, and governance activities and disclosures.
- The company has a significant amount of convertible debt.
- The company is subject to risks related to fraud and illegal activity on its platform.
- The company is subject to risks related to evolving global legal and regulatory requirements.
- The company is subject to risks related to potential product liability claims.
Future Outlook
The document contains forward-looking statements regarding the company's mission, growth strategies, ability to attract and retain buyers and sellers, the completion of the sale of Reverb, and the impact of macroeconomic and geopolitical uncertainty.
Industry Context
The announcement reflects the challenges faced by e-commerce platforms in a competitive retail environment with pressure on consumer discretionary spending. The sale of Reverb suggests a strategic shift towards focusing on core marketplaces.
Comparison to Industry Standards
- The document does not contain specific comparisons to industry standards.
- Without more information, it is difficult to compare Etsy's performance to specific competitors like Amazon, eBay, or specialized marketplaces.
- A full comparison would require benchmarking against similar companies in terms of growth rates, profitability, and key metrics like active users and GMS.
Stakeholder Impact
- Shareholders: The net loss and declining GMS may negatively impact shareholder value.
- Employees: The sale of Reverb may impact employees of that business.
- Sellers and Buyers: The company's focus on core marketplaces may lead to changes in platform features and policies.
Next Steps
- Complete the sale of Reverb.
- Focus on growing the Etsy and Depop marketplaces.
- Continue to invest in technology infrastructure, product development, and marketing.
Legal Proceedings
- The company is regularly involved in litigation, arbitration, and regulatory matters.
Key Dates
- 2019-09-3: Date of Convertible Senior Notes due 2026
- 2020-08-31: Date of Convertible Senior Notes due 2027
- 2023-03-24: Date of Amended and Restated Credit Agreement
- 2025-01-01: Start of the three-year performance period for performance stock units
- 2025-03-31: End of the quarterly period
- 2025-04-21: Date of agreement to sell Reverb
- 2027-12-31: End of the three-year performance period for performance stock units
- 2028-04-01: Vesting Date for performance stock units
Keywords
Etsy, Reverb, financial results, Q1 2025, GMS, revenue, Adjusted EBITDA, marketplace, stock units, impairment, sale, equity incentive plan
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.