ETSY
Etsy INC
NASDAQ
8-K: Etsy Reports Record Revenue in Q4 2024, But GMS Declines Amidst Challenging Market Conditions
Sentiment:
Earnings Release
19 February 2025 7:01 AM
Etsy, Inc. announced its Q4 and full year 2024 financial results, highlighting record revenue but also a decline in Gross Merchandise Sales (GMS) due to a tough economic environment.
Worse than expected
The company's GMS declined year-over-year, indicating weaker sales performance compared to the previous year.
Summary
- Etsy, Inc. reported its Q4 and full year 2024 financial results on February 19, 2025.
- Consolidated GMS for Q4 2024 was $3.7 billion, a 6.8% year-over-year decrease.
- Etsy marketplace GMS was $3.3 billion, down 8.6% year-over-year.
- Active buyers decreased by 2.6% year-over-year to 89.6 million.
- The company reactivated a record 9.8 million lapsed buyers.
- Consolidated revenue reached a record $852.2 million, a 1.2% increase year-over-year, with a take rate of 22.8%.
- Consolidated net income increased by 56.0% year-over-year to $129.9 million.
- Consolidated non-GAAP Adjusted EBITDA was a record $250.6 million.
- Etsy ended the year with $1.2 billion in cash and investments.
- During Q4 2024, Etsy repurchased approximately $260 million of its common stock.
- For Q1 2025, Etsy anticipates GMS will decline at a rate similar to Q4 2024, with a take rate of approximately 23% and an Adjusted EBITDA margin of approximately 25-26%.
Sentiment
Score: 6
Explanation: The sentiment is mixed. While revenue and profitability metrics are positive, the decline in GMS and active buyers raises concerns. The company's focus on future growth and cost management provides some optimism.
Positives
- Etsy achieved record quarterly revenue in Q4 2024.
- Net income and Adjusted EBITDA increased year-over-year.
- Depop's GMS showed strong growth.
- Etsy reactivated a record number of lapsed buyers.
- The company has a strong cash position.
Negatives
- Consolidated GMS decreased by 6.8% year-over-year in Q4 2024.
- Etsy marketplace GMS decreased by 8.6% year-over-year.
- Active buyers decreased by 2.6% year-over-year.
- GMS per active buyer decreased by 3.5% year-over-year to $121 in Q4.
- The number of habitual buyers decreased by 9.5% year-over-year.
Risks
- The company faces pressure on consumer discretionary product spending.
- There are challenging year-over-year comparisons due to a shortened holiday season.
- The retail environment is highly promotional and competitive.
- The company's future performance is subject to various risks and uncertainties, including those related to technology vulnerabilities, competition, and legal and regulatory requirements.
Future Outlook
Etsy anticipates that consolidated first quarter 2025 GMS will decline at a rate similar to the year-over-year performance reported for the fourth quarter of 2024. The company expects a take rate of approximately 23% and an Adjusted EBITDA margin of approximately 25-26% for Q1 2025.
Management Comments
- Josh Silverman, Etsy, Inc. Chief Executive Officer, stated that foundational improvements in the Etsy marketplace are enhancing customer experiences.
- Lanny Baker, Etsys Chief Financial Officer, expressed confidence in the company's future due to its financial strength, differentiated product offerings, passionate customer base, and world-class team.
- Mr. Silverman commented, 'We are moving with urgency to increase buyer engagement, drive more sales, and return to GMS growth.'
Industry Context
Etsy's results reflect broader trends in the e-commerce sector, including increased competition and pressure on consumer discretionary spending. The company is focusing on differentiating itself through unique offerings and improved customer experiences.
Comparison to Industry Standards
- Etsy's GMS decline is similar to what other e-commerce companies are experiencing in the current economic climate.
- Companies like eBay and Amazon have also reported slower growth in certain segments.
- Etsy's focus on unique and creative goods differentiates it from larger, more general e-commerce platforms.
- Etsy's adjusted EBITDA margin of 29.4% is strong compared to other e-commerce companies.
Stakeholder Impact
- Shareholders may be concerned about the decline in GMS and active buyers.
- Sellers may be impacted by changes in the Etsy marketplace and the company's focus on improving the buyer experience.
- Customers may benefit from improvements to the Etsy marketplace and the introduction of new features.
Next Steps
- Etsy will focus on increasing buyer engagement and driving more sales.
- The company will continue to invest in improving the Etsy marketplace and customer experience.
- Etsy plans to maintain a strong bottom line and generate healthy free cash flow.
Key Dates
- 2005: Etsy was founded.
- August 10, 2023: Date of sale of Elo7, whose financial results were included in consolidated results until this date.
- December 31, 2024: End of the fourth quarter and full year for which financial results are reported.
- February 19, 2025: Date of the earnings release and conference call.
Keywords
Etsy, GMS, revenue, EBITDA, marketplace, e-commerce, financial results, Depop, Reverb
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.