Q1 2025 Financial Results April 30, 2025 Forward-looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include but are not limited to statements relating to: our financial guidance for the second quarter of 2025 and underlying assumptions; our customer relationship flywheel; the impact of AI, ML, and LLMs; our product development investments and marketing portfolio; strength of our financial foundation; our resi ...

Financial Data and Key Metrics Changes - In Q1 2025, consolidated GMS was $2.8 billion, down approximately 6.5% year over year, with Etsy Marketplace GMS down 8.9% [26][25] - Consolidated revenue increased by approximately 1% year over year to $651 million, despite the GMS decline [26][27] - Adjusted EBITDA was $171 million for Q1, representing a 26.3% margin, up 30 basis points year over year [27][28] - Consolidated take rate improved to 23.3%, an increase of 170 basis points over the 21.6% take rate reported in the same period last year [28] Business Line Data and Key Metrics Changes - Etsy Marketplace GMS decreased by 8.9%, while Depop continued to deliver strong growth, benefiting consolidated results [26][27] - Services revenue grew 7.7% year over year, driven by strong growth in on-site ads revenue at both Etsy and Depop [27] - The number of reactivated buyers increased by over 6 million in Q1, indicating progress in buyer engagement strategies [45] Market Data and Key Metrics Changes - US buyer GMS represented about 75% of first quarter Etsy Marketplace GMS, with both US and non-US buyer GMS performing similarly to Q4 of the previous year [30] - Gifting GMS outperformed non-gifting GMS during the quarter, supported by product and marketing efforts [31] Company Strategy and Development Direction - The company is focused on reigniting core Etsy marketplace growth through a balanced portfolio of product investments aimed at improving GMS and customer experience [7][20] - There is an emphasis on enhancing personalization and leveraging AI to improve buyer engagement and frequency [10][12] - The company is adapting to macroeconomic challenges while maintaining a strong financial foundation and focusing on unique seller offerings [5][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic backdrop but expressed confidence in the company's ability to improve growth through product and marketing strategies [44][46] - The outlook for Q2 anticipates a decline in consolidated GMS similar to Q1, with expectations for improved performance as product and marketing strategies take effect [37][38] Other Important Information - The company announced the sale of Reverb for $105 million, which will allow for a greater focus on driving growth for Etsy and Depop [25][19] - The company has established a task force to address the impacts of global tariff regulations on its operations [17][34] Q&A Session Summary Question: Can you provide an update on the full year outlook and the second quarter EBITDA margin guide? - Management indicated that the macroeconomic backdrop remains challenging, but they are encouraged by product and marketing improvements that could drive growth throughout the year [44][46] Question: What is next on the app product roadmap? - The company is focused on increasing the app's share of GMS, which reached 44.5% in Q1, and is working on enhancing personalized browsing experiences [53][55] Question: Is there concern that the decline in active sellers is driving the decline in active buyers? - Management clarified that the decline in active sellers is intentional due to the introduction of a new shop setup fee, which has led to a healthier seller base [62][63] Question: Can you discuss the take rate guidance for Q2? - Management explained that the take rate is expected to remain flat due to lapping previous price-related increments that had benefited the take rate [74] Question: What are the gross margin headwinds from free shipping and machine learning costs? - Management acknowledged that higher processing costs and investments in machine learning and search development could create some gross margin headwinds, but these are necessary for product experience [79][80]

Financial Data and Key Metrics Changes - In Q1 2025, consolidated GMS was $2.8 billion, down approximately 6.5% year over year, with FX representing an 80 basis point headwind [26] - Consolidated revenue increased by approximately 1% year over year to $651 million, despite a decline in GMS [26] - Adjusted EBITDA was $171 million for Q1, representing a 26.3% margin, up 30 basis points year over year [27] - Consolidated take rate improved to 23.3%, an increase of 170 basis points over the 21.6% take rate reported in the same period last year [28] Business Line Data and Key Metrics Changes - Etsy Marketplace GMS was down 8.9% year over year, while Depop continued to deliver strong growth in buyers, sellers, and GMS [26][30] - Marketplace revenue decreased 1.8% year over year, reflecting the decline in GMS, partially offset by increases in payments revenue [27] - Services revenue grew 7.7% year over year, with strong growth in on-site ads revenue at both Etsy and Depop [27] Market Data and Key Metrics Changes - US buyer GMS represented about 75% of first quarter Etsy Marketplace GMS, with both US and non-US buyer GMS performing similarly to Q4 of last year [30] - Gifting GMS outperformed non-gifting GMS during the quarter, benefiting from product and marketing efforts [30] Company Strategy and Development Direction - The company is focused on reigniting core Etsy marketplace growth through a balanced portfolio of product investments aimed at improving GMS and customer experience [6][19] - There is an emphasis on enhancing the mobile app experience, with the app reaching an all-time high of 44.5% of total Etsy Marketplace GMS [9] - The company is leveraging AI and machine learning to create personalized shopping experiences and improve customer engagement [10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic backdrop but expressed confidence in the company's ability to adapt and improve growth through product and marketing strategies [44][45] - The outlook for Q2 anticipates a decline in consolidated GMS similar to Q1, but management remains optimistic about future growth driven by ongoing product and marketing initiatives [36][45] Other Important Information - The company announced the sale of Reverb for $105 million, which is expected to close in the coming months [24] - A new shop setup fee of $29 for new sellers was introduced, which management believes will lead to a healthier seller environment [61] Q&A Session Summary Question: Update on full year outlook and second quarter EBITDA margin guidance - Management indicated that the macroeconomic backdrop remains challenging, but they are encouraged by product and marketing improvements that could drive growth throughout the year [44][45] Question: Next steps for the app product roadmap - The app is expected to continue growing as a percentage of GMS, with ongoing efforts to enhance the browsing experience and personalization [52][54] Question: Concerns about the decline in active sellers impacting active buyers - Management clarified that the decline in active sellers is intentional and aimed at improving the quality of sellers on the platform, and they do not see a direct correlation with active buyer decline [61][62] Question: Take rate guidance for Q2 - Management explained that the take rate is expected to remain flat due to lapping previous price-related increments and improvements in Etsy Ads [70][71] Question: Gross margin headwinds from free shipping and ML costs - Management acknowledged that higher processing costs and machine learning expenses could create some gross margin headwinds, but they are necessary for enhancing the product experience [75][76] Question: Opportunities to leverage domestic sourcing amid rising prices - Management is focusing on promoting domestic sellers and enhancing the value proposition of Etsy in light of potential price increases from competitors [90]

[Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) This section details the company's unaudited condensed consolidated financial statements, accompanying notes, and management's discussion and analysis of financial performance and condition [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarter ended March 31, 2025, highlighting a slight revenue increase to **$651.2 million** but a net loss of **$52.1 million** due to a **$101.7 million** goodwill impairment charge Consolidated Statement of Operations Highlights (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :--- | :--- | :--- | | **Revenue** | **$651.2** | **$646.0** | | **Gross Profit** | **$459.1** | **$458.8** | | **Asset Impairment Charge** | **$101.7** | **$0** | | **(Loss) Income from Operations** | **$(22.3)** | **$68.1** | | **Net (Loss) Income** | **$(52.1)** | **$63.0** | | **Diluted EPS** | **$(0.49)** | **$0.48** | Consolidated Balance Sheet Highlights (As of March 31, 2025 vs Dec 31, 2024) | Metric | As of March 31, 2025 (in millions) | As of December 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | **$1,110.0** | **$1,327.7** | | **Goodwill** | **$36.2** | **$137.1** | | **Total Assets** | **$2,120.8** | **$2,417.8** | | **Total Liabilities** | **$3,031.1** | **$3,176.6** | | **Total Stockholders' Deficit** | **$(910.3)** | **$(758.9)** | Consolidated Cash Flow Highlights (Q1 2025 vs Q1 2024) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | **$49.2** | **$69.0** | | **Net Cash used in Investing Activities** | **$(20.7)** | **$(25.1)** | | **Net Cash used in Financing Activities** | **$(204.8)** | **$(163.0)** | | **Net Decrease in Cash** | **$(162.0)** | **$(125.5)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies and specific financial items, including a **$101.7 million** goodwill impairment for Reverb and the formal agreement to sell Reverb for **$105.0 million** - On April 21, 2025, the company entered into an agreement to sell Reverb, its musical instrument marketplace, for a purchase price of **$105.0 million** in cash. The transaction is expected to close in the coming months[95](index=95&type=chunk) - A non-cash goodwill impairment charge of **$101.7 million** was recorded in Q1 2025 to write off goodwill in full for the Reverb reporting unit. This was triggered by the determination that a sale of the business was more likely than not[51](index=51&type=chunk)[53](index=53&type=chunk)[96](index=96&type=chunk) Revenue Disaggregation | Revenue Type | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Marketplace revenue | **$458.5** | **$467.0** | | Services revenue | **$192.7** | **$179.0** | | **Total Revenue** | **$651.2** | **$646.0** | - In Q1 2025, the company repurchased **3.717 million** shares of its common stock at an average price of **$50.90** per share. As of March 31, 2025, **$811.0 million** remained available for repurchase under the October 2024 program[84](index=84&type=chunk)[88](index=88&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and cash flows, including key trends and factors impacting performance [Overview](index=24&type=section&id=MD%26A%20Overview) Etsy operates two-sided online marketplaces, with its primary focus on the Etsy marketplace for unique goods, alongside Depop for fashion resale, and has agreed to sell Reverb for **$105.0 million** - Etsy's strategy is focused on building a sustainable competitive advantage ('Right to Win'), growing the Etsy marketplace in core geographies, and leveraging its marketplace playbook at Etsy and Depop[103](index=103&type=chunk) - The company entered into an agreement on April 21, 2025, to sell its musical instrument marketplace, Reverb, for **$105.0 million** in cash[107](index=107&type=chunk) [Key Operating and Financial Metrics](index=25&type=section&id=MD%26A%20Key%20Operating%20and%20Financial%20Metrics) Consolidated Gross Merchandise Sales (GMS) decreased by **6.5%** year-over-year to **$2.8 billion**, primarily due to a decline in the Etsy marketplace GMS amid pressure on consumer discretionary spending, while total revenue grew **0.8%** to **$651.2 million** Key Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | GMS | **$2,793.3** | **$2,986.5** | **(6.5)%** | | Revenue | **$651.2** | **$646.0** | **0.8%** | | Revenue Take Rate | **23.3%** | **21.6%** | **+170 bps** | | Adjusted EBITDA | **$171.1** | **$167.9** | **1.9%** | | Active Sellers | **8.1** | **9.1** | **(11.3)%** | | Active Buyers | **94.8** | **96.4** | **(1.7)%** | - The decrease in GMS was primarily driven by the Etsy marketplace, reflecting continued pressure on consumer discretionary spending, a competitive retail environment, and changes in product development strategy that prioritized foundational investments[111](index=111&type=chunk) - Currency-neutral GMS declined by **5.7%** in Q1 2025, indicating that foreign exchange rates had a negative impact of **0.8%** on reported GMS[117](index=117&type=chunk) [Results of Operations](index=27&type=section&id=MD%26A%20Results%20of%20Operations) Total revenue increased by **0.8%** to **$651.2 million**, driven by Services revenue growth offsetting a Marketplace revenue decline, while operating expenses rose **23.2%** primarily due to a **$101.7 million** goodwill impairment charge for Reverb - Marketplace revenue decreased **1.8%** due to lower transaction fee revenue from a decline in Etsy marketplace GMS, partially offset by a new seller set-up fee and increased Depop payments revenue[118](index=118&type=chunk) - Services revenue grew **7.7%**, primarily driven by a **6.2%** increase in on-site advertising revenue due to a higher average price per click on Etsy Ads[119](index=119&type=chunk) - Marketing expenses decreased **1.5%** as the company reduced brand marketing spend (e.g., no prime time big game TV ad) and increased investment in performance marketing. Paid GMS grew to **23%** of overall GMS from **20%** YoY[121](index=121&type=chunk) - A **$101.7 million** asset impairment charge was recorded related to the goodwill of Reverb, significantly impacting operating income[124](index=124&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=MD%26A%20Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$867.7 million** in cash, cash equivalents, and short-term investments, plus an undrawn **$400.0 million** revolving credit facility, despite increased cash used in financing activities due to higher stock repurchases - As of March 31, 2025, the company had **$867.7 million** in cash, cash equivalents, and short-term investments, and access to a **$400.0 million** senior secured revolving credit facility[130](index=130&type=chunk) Historical Cash Flows | Activity | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Operating Activities | **$49.2** | **$69.0** | | Investing Activities | **$(20.7)** | **$(25.1)** | | Financing Activities | **$(204.8)** | **$(163.0)** | - The increase in cash used for financing activities was primarily due to an increase in stock repurchases during the quarter[139](index=139&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Management states that there have been no material changes to the company's quantitative and qualitative disclosures about market risks during the first quarter of 2025 compared to those disclosed in the 2024 Annual Report on Form 10-K - There were no material changes to market risk disclosures during the three months ended March 31, 2025[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management, including the CEO and CFO, evaluated and concluded that the disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[144](index=144&type=chunk) - No material changes to internal controls over financial reporting were identified during the first quarter of 2025[146](index=146&type=chunk) [Part II - Other Information](index=33&type=section&id=Part%20II%20-%20Other%20Information) This section covers legal proceedings, risk factors, equity security sales, and other disclosures relevant to the company's operations and financial health [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various claims and litigation in the ordinary course of business, with management believing the outcomes will not have a material adverse effect on its financial condition or operations - The company is regularly involved in various claims and litigation but does not currently expect the outcomes to have a material adverse effect on its business[83](index=83&type=chunk)[148](index=148&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section details the significant risks that could materially affect the company's business, financial condition, and operating results, encompassing operational, strategic, regulatory, and other investment-related factors [Operational Risks](index=33&type=section&id=Risk%20Factors%20-%20Operational%20Risks) Operational risks include fluctuating quarterly results due to macroeconomic conditions, the critical need to attract and retain buyers and sellers, reliance on third-party technology, and vulnerability to cyber-attacks and data breaches - Quarterly operating results may fluctuate due to factors beyond control, such as economic downturns, inflation, and geopolitical events, which can cause significant stock price fluctuations[149](index=149&type=chunk)[150](index=150&type=chunk) - The business depends on attracting and retaining active buyers and sellers; failure to do so could harm financial performance, especially as GMS is concentrated in the most active users[160](index=160&type=chunk)[164](index=164&type=chunk) - The company is vulnerable to technology disruptions, cyber-attacks, and security breaches, which could lead to service interruptions, data loss, and reputational damage. The Etsy marketplace relies substantially on Google Cloud[169](index=169&type=chunk)[180](index=180&type=chunk) [Strategic Risks](index=44&type=section&id=Risk%20Factors%20-%20Strategic%20Risks) Strategic risks encompass intense competition from diverse retailers, challenges in marketing effectiveness due to evolving digital landscapes, and potential failures in executing business strategy, including the announced sale of Reverb and future goodwill impairments - The company faces intense competition from large e-commerce marketplaces, national retailers, and social commerce channels, many of which have greater resources and offer features like free and fast shipping[217](index=217&type=chunk)[220](index=220&type=chunk)[222](index=222&type=chunk) - Marketing effectiveness is at risk from changes in search engine algorithms (e.g., Google), social media platform policies, and the rise of ad-blocking technologies[229](index=229&type=chunk)[230](index=230&type=chunk)[232](index=232&type=chunk) - The proposed sale of Reverb is subject to closing conditions and may not be completed as planned, which could result in expended management resources, transaction costs, and negative publicity[246](index=246&type=chunk)[247](index=247&type=chunk) - The company has incurred significant goodwill impairment charges for Reverb, Depop, and Elo7 in the past and may incur further charges, which would negatively impact operating results[248](index=248&type=chunk)[249](index=249&type=chunk) [Regulatory, Compliance, and Legal Risks](index=51&type=section&id=Risk%20Factors%20-%20Regulatory%2C%20Compliance%2C%20and%20Legal%20Risks) This section details risks from a complex and evolving global regulatory landscape, including potential liability for illegal items, high litigation costs, compliance with privacy and data protection laws, and challenges from evolving tax regimes and increased tech platform regulation - The company faces risk of liability for counterfeit, infringing, or unlawful items listed by sellers, as legal safe harbors like the DMCA are limited and subject to change[265](index=265&type=chunk)[266](index=266&type=chunk) - Compliance with complex and evolving global privacy and data protection regulations (e.g., GDPR, U.S. state laws) is costly and failure to comply could result in significant fines and reputational damage[273](index=273&type=chunk)[276](index=276&type=chunk) - Evolving tax laws, such as those imposing indirect tax collection on marketplaces and digital services taxes, create complexity and could adversely affect the business and its sellers[278](index=278&type=chunk)[279](index=279&type=chunk) - Increased regulation of technology companies, such as the E.U. Digital Services Act (DSA) and the U.K. Online Safety Act, may impose significant compliance costs and operational burdens on Etsy and its sellers[285](index=285&type=chunk)[287](index=287&type=chunk) [Other Risks](index=56&type=section&id=Risk%20Factors%20-%20Other%20Risks) This section covers other investment-related risks, including stock price volatility, potential dilution from future stock sales or convertible note conversions, discretionary stock repurchase programs, and anti-takeover provisions that could affect stock price - The price of the company's common stock has been and will likely continue to be volatile, which could subject the company to securities litigation[296](index=296&type=chunk) - Future sales of common stock or conversion of the outstanding convertible notes could result in additional dilution to stockholders and cause the stock price to decline[298](index=298&type=chunk)[299](index=299&type=chunk) - Anti-takeover provisions, such as a classified board and super-majority voting requirements, could delay or prevent a change in control and depress the stock price[307](index=307&type=chunk)[309](index=309&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's stock repurchase activity for the first quarter of 2025, including the repurchase of **3.717 million** shares for approximately **$189.2 million** and the remaining availability under the October 2024 program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased (in thousands) | Average Price Paid per Share ($) | | :--- | :--- | :--- | | January 1 - 31 | **1,140** | **$53.57** | | February 1 - 28 | **1,090** | **$53.81** | | March 1 - 31 | **1,487** | **$46.71** | | **Total** | **3,717** | **$50.90** | - The June 2023 stock repurchase program was completed in Q1 2025. A new program authorized in October 2024 has no expiration date[315](index=315&type=chunk) [Item 3. Defaults Upon Senior Securities](index=60&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[311](index=311&type=chunk) [Item 4. Mine Safety Disclosures](index=60&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[312](index=312&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[314](index=314&type=chunk) [Item 6. Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including management compensation plans, CEO and CFO certifications required under the Sarbanes-Oxley Act, and the Inline XBRL documents - Exhibits filed include amended executive severance and non-employee director compensation plans, forms of RSU agreements, and required CEO/CFO certifications[316](index=316&type=chunk)

Financial Performance - Consolidated GMS for Q1 2025 was $2.8 billion, down 6.5% year-over-year, with Etsy marketplace GMS at $2.3 billion, down 8.9% year-over-year[5]. - Consolidated revenue was $651.2 million, up 0.8% compared to Q1 2024, with a take rate of 23.3%, an increase of 170 basis points[5]. - Consolidated net loss was $52.1 million, reflecting an impairment charge of $101.7 million related to Reverb, with a net loss margin of approximately (8.0)%[5]. - Revenue for Q1 2025 was $651,176,000, a slight increase from $645,954,000 in Q1 2024, representing a growth of 0.2%[23]. - Net loss for Q1 2025 was $52,096,000 compared to a net income of $63,004,000 in Q1 2024, indicating a significant decline[23]. - Total operating expenses increased to $481,442,000 in Q1 2025 from $390,731,000 in Q1 2024, reflecting a rise of 23.3%[23]. - Adjusted EBITDA for Q1 2025 was $171,102,000, up from $167,935,000 in Q1 2024, resulting in an adjusted EBITDA margin of 26.3%[26]. - Currency-neutral Gross Merchandise Sales (GMS) declined by 5.7% in Q1 2025 compared to a decline of 4.1% in Q1 2024[25]. User Engagement and Buyer Activity - Active buyers decreased by 3.4% year-over-year to 88.5 million, while 6.5 million buyers were reactivated, representing a 2.1% increase from the prior year[5]. - The Etsy app achieved its highest ever share of GMS, with significant improvements in user engagement and new features driven by AI and machine learning[7]. - Depop experienced strong top-line growth, particularly in the U.S., with increased personalized email and push content leading to higher engagement[10]. Future Outlook - Etsy anticipates that consolidated Q2 2025 GMS will decline at a rate similar to Q1 2025 performance, with an Adjusted EBITDA margin guidance of approximately 25%[12]. - The company is focusing on enhancing the buyer experience through improved search capabilities and local shipping messaging in response to evolving tariff landscapes[8]. Asset and Liability Management - Total assets decreased from $2,417,782 thousand as of December 31, 2024, to $2,120,802 thousand as of March 31, 2025, representing a decline of approximately 12.3%[22]. - Current liabilities decreased from $665,113 thousand to $519,138 thousand, a reduction of about 21.9%[22]. - Total stockholders' deficit increased from $(758,866) thousand to $(910,299) thousand, indicating a decline in equity[22]. - Long-term debt remained relatively stable, increasing slightly from $2,288,083 thousand to $2,289,149 thousand[22]. - Cash and cash equivalents decreased from $811,178 thousand to $649,191 thousand, a decline of approximately 20%[22]. - Accounts payable decreased from $25,979 thousand to $17,396 thousand, a reduction of about 33%[22]. - Accrued expenses decreased from $374,947 thousand to $264,207 thousand, a decline of approximately 29.5%[22]. - Deferred revenue increased from $19,213 thousand to $22,297 thousand, an increase of about 15.5%[22]. - Total current assets decreased from $1,109,983 thousand to $1,032,727 thousand, a decline of approximately 6.9%[22]. - Total liabilities decreased from $3,176,648 thousand to $3,031,101 thousand, a reduction of about 4.6%[22]. Cash Flow and Financing Activities - Cash and cash equivalents at the end of Q1 2025 were $649,191,000, down from $788,837,000 at the end of Q1 2024, a decrease of 17.7%[24]. - The company reported an asset impairment charge of $101,703,000 in Q1 2025, which was not present in Q1 2024[23]. - Stock-based compensation expense for Q1 2025 was $62,108,000, compared to $70,683,000 in Q1 2024, showing a decrease of 12.1%[26]. - The weighted-average common shares outstanding for basic shares decreased to 107,084,000 in Q1 2025 from 118,440,000 in Q1 2024[23]. - The company experienced a net cash used in financing activities of $204,782,000 in Q1 2025, compared to $163,014,000 in Q1 2024, an increase of 25.6%[24]. Strategic Decisions - Etsy has signed a definitive agreement to sell Reverb, with the transaction expected to close in the coming months[9].

Core Insights - Etsy's first quarter 2025 financial results met expectations, showing solid adjusted EBITDA performance despite revenue pressure [2][3] - The company is leveraging AI and machine learning to enhance the app experience and drive user engagement [2] - Etsy's resilient two-sided marketplace model is positioned to navigate macroeconomic challenges [2] Financial Performance - Gross Merchandise Sales (GMS) for Q1 2025 was $2.8 billion, a decline of 6.5% year-over-year [4][5] - Revenue reached $651.2 million, up 0.8% compared to Q1 2024, with a take rate of 23.3%, an increase of 170 basis points [4][5] - Adjusted EBITDA was $171.1 million, with an adjusted EBITDA margin of 26.3%, slightly up from 26.0% in the previous year [4][5] Operational Highlights - Active sellers decreased by 11.3% year-over-year to 8,095, while active buyers fell by 3.4% to 88.5 million [4][5] - The number of habitual buyers dropped by 11.0% year-over-year to 6.2 million [5] - Depop experienced strong growth, achieving its highest GMS since acquisition in 2021 [5][12] Strategic Initiatives - Etsy is focusing on enhancing customer engagement through improved product experiences and strategic marketing initiatives [7][8] - The company has established a task force to address tariff changes and improve buyer and seller experiences [9] - Significant investments are planned to support GMS improvement and enhance the marketplace experience [3] Future Guidance - For Q2 2025, Etsy anticipates GMS to decline at a rate similar to Q1 2025, with an adjusted EBITDA margin around 25% [14]

Group 1: Trade Policy Concerns - Etsy CEO Josh Silverman is advocating against the elimination of the de minimis exemption for small parcel imports from China, which he claims would negatively impact 8 million Etsy sellers [1][2][3] - The de minimis exemption allows items valued at $800 or less to enter the U.S. without customs duties, and its removal could lead to increased costs for sellers if raw materials become more expensive [3][4] - Silverman warns that the lack of an organized system for collecting duties on small-value goods could result in significant delays and a potential backlog of parcels, severely affecting small commerce [5][6] Group 2: Tax Reporting Changes - Silverman is pushing for a change in the 1099-K tax reporting threshold, which was lowered from $20,000 to $600, arguing that this creates unnecessary friction for small business owners [7][8][9] - The current threshold requires tax filings even for minimal revenue, which could burden sellers who do not owe taxes [8][9] - There are ongoing congressional bills aimed at reverting the threshold to a higher amount, which Silverman supports [9] Group 3: Caregiver Support - Silverman highlights the need for federal support for caregivers, as many Etsy sellers face challenges balancing business and caregiving responsibilities [9][10][11] - A significant portion of Etsy's sellers are women, with 25% having children at home, indicating a strong need for support systems [10] - The lack of paid time off for solo entrepreneurs means that caregiving responsibilities can directly impact their business revenue [11]

Etsy (ETSY) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Individual investors often find it hard ...

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An employee walks past a quilt displaying Etsy Inc. signage at the company's headquarters in the Brooklyn.Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump's sweeping tariffs raise concerns about soaring prices. In a post to Etsy's website on Thursday, CEO Josh Silverman said the company is "surfacing new ways for buyers to discover businesses in their countries" via shopping pages and by featuring local sell ...