Financial Data and Key Metrics Changes - Consolidated GMS for Q2 2025 was $2.8 billion, down 4.8% year over year, with a 2.6% decline when excluding Reverb [25][26] - Consolidated revenue increased by approximately 4% to $673 million, with adjusted EBITDA at $169 million, representing a 25.1% margin [26][27] - Etsy Marketplace GMS was down 5.4% year over year, showing a notable improvement from the previous quarter's 6.2% decline [27][28] Business Line Data and Key Metrics Changes - Etsy Marketplace revenue decreased by 0.5% year over year, while Services revenue grew by 15.3% year over year, driven by strong growth in on-site ads revenue [31][32] - The take rate expanded by 200 basis points to 24%, aided by the divestiture of Reverb, which had a lower take rate [32][33] - The app GMS grew year over year, accounting for 44.8% of total GMS, up three percentage points from the previous year [29][30] Market Data and Key Metrics Changes - Trailing twelve-month active buyers in the Etsy marketplace stood at 87.3 million, down 4.6% year over year [27] - The number of reactivated buyers increased by 2.8% year over year, with 4.8 million new buyers added in the quarter [28] - GMS per buyer showed signs of stabilization, holding steady sequentially at $120, while monthly GMS per buyer trends improved in May and June [28] Company Strategy and Development Direction - The company is focusing on enhancing the customer experience through improved app features and personalized marketing [5][10] - A strategic shift was made to prioritize customer engagement and retention, with a focus on machine learning for better inventory matching [13][17] - The company aims to position itself as a leader in agentic shopping, leveraging unique inventory and personalized experiences [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recent performance and the potential for sustained growth, citing favorable competitive dynamics and stable consumer spending [6][24] - The outlook for Q3 includes expected consolidated GMS between $2.6 billion and $2.7 billion, indicating continued improvement [38] - Management emphasized a disciplined approach to investments, focusing on ROI and long-term growth potential [50][53] Other Important Information - The company completed the sale of Reverb on June 2, impacting year-over-year comparisons [24] - The app's user experience has significantly improved, leading to higher satisfaction and engagement metrics [9][10] - The company generated $90 million in free cash flow during the quarter, ending with $1.5 billion in cash [36][37] Q&A Session Summary Question: What drove the sequential improvement in Etsy's GMS trajectory? - Management highlighted four key drivers: increased app usage, personalized marketing efforts, enhanced paid social strategies, and improved performance in Google PLA auctions [42][46] Question: What is the outlook for Etsy's EBITDA margins? - Management indicated that they are managing to high twenties EBITDA margins, with expectations for a step-up in margins in Q3 due to ongoing investments [43][50] Question: How is the app contributing to growth? - The app is seen as a critical component for increasing customer engagement and lifetime value, with efforts to drive more users to adopt the app [59][61] Question: How is consumer demand across different income cohorts? - Management noted a slight improvement in consumer spending across all income cohorts, with higher income households showing a bit more resilience [70][71] Question: Can you elaborate on personalized communication efforts? - Management discussed the importance of personalized content in push and email notifications, aiming to enhance user engagement and conversion rates [76][80] Question: How is marketing spend allocated between Etsy and Depop? - The marketing spend in Q2 was more normalized between Etsy and Depop, with expectations for increased investment in Depop moving forward [89][91]

Financial Data and Key Metrics Changes - Consolidated GMS for Q2 2025 was $2.8 billion, down 4.8% year over year, while excluding Reverb, it was approximately $2.7 billion, down 2.6% year over year [25][26] - Consolidated revenue increased by approximately 4% to $673 million, with adjusted EBITDA at $169 million, representing a 25.1% margin [26][32] - Trailing twelve month active buyers in the Etsy marketplace stood at 87.3 million, down 4.6% year over year [27] Business Line Data and Key Metrics Changes - Etsy Marketplace GMS was down 5.4% year over year, but this was an improvement from a 6.2% decline in Q1 2025 [25][27] - Depop reported GMS growth accelerating to 35% year over year, reaching an annualized run rate of $1 billion [5][26] - Services revenue grew 15.3% year over year, driven by strong growth in on-site ads revenue at both Etsy and Depop [31] Market Data and Key Metrics Changes - In the U.S., GMS for Depop grew 54% year over year, positioning it as the fastest growing player in the online fashion resale market [5] - Monthly GMS per buyer trends strengthened over the quarter, inflecting into positive year over year comparisons in May and June [28] - The proportion of Etsy GMS generated on the app increased to 44.8%, three percentage points higher than a year ago [29] Company Strategy and Development Direction - The company is focused on enhancing the customer experience through a strategic shift to make Etsy a more delightful place to shop, emphasizing a recommendation-driven approach [4][10] - Key priorities include improving customer discovery, enhancing machine learning for better inventory matching, and retaining valuable customers through loyalty programs [12][13][19] - The company plans to shift marketing investments from traditional media to digital platforms, increasing focus on OTT, audio, and social media [14][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recent performance and the potential for sustained growth, citing improvements in consumer spending and favorable competitive dynamics [5][27] - The company anticipates continued improvement in growth comparisons in the second half of the year, with Q3 consolidated GMS expected to be between $2.6 billion and $2.7 billion [38] - Management emphasized a disciplined approach to investments, focusing on ROI and long-term growth potential [51][49] Other Important Information - The company completed the sale of Reverb on June 2, which impacted the reported results for Q2 2025 [23][24] - The app's user experience has improved significantly, with increased satisfaction reported among users [7][9] - The company generated $90 million in free cash flow in the quarter, ending with $1.5 billion in cash and approximately $3 billion in convertible debt [36][37] Q&A Session Summary Question: What helped drive improved spending despite habitual buyers continuing to moderate? - Management noted that improved app experience, personalized marketing, and increased visibility in paid social contributed to the sequential improvement in GMS [44][46] Question: What is driving the margin compression in the core business? - Management clarified that they are managing to high twenties EBITDA margins while investing in app experience and marketing to drive long-term growth [48][49] Question: How should we think about the app's growth and its impact on GMS? - Management indicated that app adoption leads to higher lifetime value for buyers, and they are focusing on making the app a central part of the customer experience [57][62] Question: What is the demand profile across different household income cohorts? - Management observed slightly healthier consumer spending across all cohorts, with higher income households showing stronger resilience [67] Question: Can you elaborate on the personalized communication and its impact on conversion? - Management highlighted that personalized push and email notifications have shown positive results, with plans to enhance personalization further using LLMs [76][78]

Core Insights - Etsy reported quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.54 per share, and down from $0.41 per share a year ago, representing an earnings surprise of -53.70% [1] - The company posted revenues of $672.66 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.80%, and up from $647.81 million year-over-year [2] - Etsy has outperformed the S&P 500, gaining about 14% since the beginning of the year compared to the S&P 500's gain of 8.3% [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.63 on revenues of $645.56 million, and for the current fiscal year, it is $1.80 on revenues of $2.79 billion [7] - The estimate revisions trend for Etsy was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Internet - Commerce industry, to which Etsy belongs, is currently in the bottom 41% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Etsy's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Core Insights - Etsy reported a 3.8% year-over-year revenue growth in Q2, reaching $670 million, surpassing analyst expectations of $647 million [1] - The company's net profit for the quarter was $28.8 million, translating to earnings of $0.25 per share, down from $53 million and $0.41 per share in the same period last year [1] - Active buyer count decreased by 4.6% to 87.3 million, while total gross merchandise sales fell by 4.8% to $2.8 billion [1]

Financial Performance - Consolidated GMS was $2.8 billion, a decrease of 4.8% year-over-year, or 5.8% on a currency-neutral basis[7] - Consolidated revenue reached $673 million, representing a 3.8% year-over-year increase[7] - Adjusted EBITDA amounted to $169 million, resulting in a 25.1% adjusted EBITDA margin[7] - Excluding Reverb, Q2 2025 Consolidated GMS was $2.7 billion, down 2.6% Y/Y on the same basis[7] Marketplace Dynamics - Etsy marketplace GMS decreased by 5.4% year-over-year, or 6.3% on a currency-neutral basis, totaling $2.4 billion[11] - Depop marketplace GMS increased by 35.3% year-over-year, or 34.7% on a currency-neutral basis, reaching $250 million[11] - Etsy app GMS grew year-over-year and accounted for approximately 45% of total GMS[12, 59] Buyer & Seller Metrics - Etsy marketplace had 87.3 million active buyers, a decrease of 4.6% year-over-year[55] - New buyers totaled 4.8 million, a decrease of 14.5% year-over-year[82] - GMS per active buyer was $120, a decrease of 2.9% year-over-year[57, 82] Strategic Initiatives & Investments - Approximately 40% of marketing messages are now personalized, an increase from approximately 27% in Q4 2024[16] - Share repurchases during Q2 2025 amounted to approximately $335 million[75] - The company is aiming for near-total personalization of marketing messages by year-end[16]

General Information [Cover Page Information](index=1&type=section&id=Cover%20Page%20Information) This section provides administrative details of the Form 10-Q filing, including the registrant's name, address, securities registered, and filer status as a large accelerated filer - Etsy, Inc. is filing a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) - The registrant is a **Large Accelerated Filer**[4](index=4&type=chunk) Registered Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock, $0.001 par value per share | ETSY | The Nasdaq Global Select Market | [Note Regarding Forward-Looking Statements](index=3&type=section&id=Note%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary statement regarding forward-looking statements in the report, highlighting that they involve known and unknown risks and uncertainties that could cause actual results to differ materially - **Forward-looking statements** relate to **growth potential**, **impact of strategies** (including **AI investments**), ability to attract/retain buyers/sellers, **profitability**, **strategic investments**, **marketplace trustworthiness**, and effects of **macroeconomic/geopolitical uncertainty**[8](index=8&type=chunk) - Actual results may differ materially due to **risks** described in Part II, Item 1A, '**Risk Factors**' and other uncertainties[9](index=9&type=chunk) - The company disclaims any obligation to update **forward-looking statements**[12](index=12&type=chunk) [Summary Risk Factors](index=4&type=section&id=Summary%20Risk%20Factors) This section provides a high-level overview of the key risks facing the company, categorized into financial performance and operational, strategic, regulatory, compliance, legal, and other risks - **Risks** are categorized into **Financial Performance** and **Operational**, **Strategic**, **Regulatory**, **Compliance**, and **Legal**, and **Other Risks**[16](index=16&type=chunk)[17](index=17&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - **Key risks** include **fluctuating operating results** due to **macroeconomic conditions**, failure to meet **guidance**, importance of **marketplace trustworthiness**, **technology disruptions**, **intense competition**, and **compliance with evolving regulations**[17](index=17&type=chunk)[21](index=21&type=chunk) - Investors should review Part II, Item 1A, '**Risk Factors**' for a more complete discussion[15](index=15&type=chunk) Part I - Financial Information [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, including the Balance Sheets, Statements of Operations, Comprehensive Income, Changes in Stockholders' Deficit, and Cash Flows for the reported periods [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' deficit for the reported periods Consolidated Balance Sheets (Unaudited) (In thousands) | ASSETS | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,183,357 | $811,178 | | Short-term investments | $228,979 | $228,322 | | Total current assets | $1,647,999 | $1,327,691 | | Goodwill | $38,072 | $137,089 | | Total assets | $2,557,149 | $2,417,782 | | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | Total current liabilities | $486,362 | $665,113 | | Long-term debt, net | $2,978,971 | $2,288,083 | | Total liabilities | $3,681,719 | $3,176,648 | | Total stockholders' deficit | $(1,124,570) | $(758,866) | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income (loss) for the reported periods Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $672,663 | $647,806 | $1,323,839 | $1,293,760 | | Gross profit | $479,115 | $463,716 | $938,230 | $922,537 | | Income from operations | $76,429 | $70,169 | $54,102 | $138,259 | | Net income (loss) | $28,840 | $53,005 | $(23,256) | $116,009 | | Basic EPS | $0.28 | $0.46 | $(0.22) | $0.99 | | Diluted EPS | $0.25 | $0.41 | $(0.22) | $0.89 | [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's comprehensive income, including net income and other comprehensive income (loss), for the reported periods Consolidated Statements of Comprehensive Income (Unaudited) (In thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $28,840 | $53,005 | $(23,256) | $116,009 | | Total other comprehensive income (loss) | $48,486 | $(4,176) | $77,766 | $(18,293) | | Comprehensive income | $77,326 | $48,829 | $54,510 | $97,716 | [Consolidated Statements of Changes in Stockholders' Deficit](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Deficit) This section outlines changes in the company's equity, including stock-based compensation, repurchases, and net income (loss), for the reported periods Changes in Stockholders' Deficit (Unaudited) (In thousands) - Six Months Ended June 30, 2025 | Item | Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of Dec 31, 2024 | 108,540 | $109 | $1,322,809 | $(1,784,037) | $(297,747) | $(758,866) | | Stock-based compensation | — | — | $131,643 | — | — | $131,643 | | Stock repurchase | (10,076) | $(10) | — | $(528,550) | — | $(528,560) | | Net loss | — | — | — | $(23,256) | — | $(23,256) | | Balance as of June 30, 2025 | 99,608 | $100 | $1,431,154 | $(2,335,843) | $(219,981) | $(1,124,570) | Changes in Stockholders' Deficit (Unaudited) (In thousands) - Six Months Ended June 30, 2024 | Item | Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of Dec 31, 2023 | 119,069 | $119 | $1,081,026 | $(1,357,390) | $(267,470) | $(543,715) | | Stock-based compensation | 9 | — | $152,551 | — | — | $152,551 | | Stock repurchase | (4,577) | $(5) | — | $(311,261) | — | $(311,266) | | Net income | — | — | — | $116,009 | — | $116,009 | | Balance as of June 30, 2024 | 115,315 | $115 | $1,203,294 | $(1,552,642) | $(285,763) | $(634,996) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the company's cash inflows and outflows from operating, investing, and financing activities for the reported periods Condensed Consolidated Statements of Cash Flows (Unaud

Financial Performance - Etsy's second quarter 2025 GMS was $2.8 billion, down 4.8% year-over-year, with a currency-neutral decline of 5.8%[7] - Revenue for the second quarter 2025 was $672.7 million, representing a 3.8% increase compared to the same quarter in 2024, driven by on-site ads performance[7] - The take rate improved to 24.0%, up 200 basis points year-over-year, primarily due to enhanced Etsy Ads revenue[7] - Non-GAAP Adjusted EBITDA for the quarter was $169.0 million, with an Adjusted EBITDA margin of approximately 25.1%[7] - Revenue for Q2 2025 was $672.7 million, a 3.1% increase from $647.8 million in Q2 2024[19] - Gross profit for Q2 2025 reached $479.1 million, compared to $463.7 million in Q2 2024, reflecting a gross margin improvement[19] - Adjusted EBITDA for Q2 2025 was $169.0 million, with an adjusted EBITDA margin of 25.1%, compared to 27.7% in Q2 2024[22] - Total operating expenses for Q2 2025 were $402.7 million, slightly up from $393.5 million in Q2 2024[19] Buyer Activity - Active buyers decreased by 4.6% year-over-year to 87.3 million, while 6.5 million buyers were reactivated during the quarter[7] Cash and Debt Management - Etsy completed a private placement of convertible notes, raising approximately $700 million in cash during the quarter[7] - The company repurchased approximately $335 million of its common stock, reflecting confidence in long-term opportunities[6] - The company repurchased $523.9 million in stock during the six months ended June 30, 2025[20] - Long-term debt rose significantly to $2,978,971,000 from $2,288,083,000, indicating an increase of approximately 30.2%[18] - Cash and cash equivalents stood at $1,183,357,000, up from $811,178,000, marking an increase of about 45.5%[18] - Cash and cash equivalents at the end of Q2 2025 were $1.18 billion, an increase from $759.2 million at the end of Q2 2024[20] Asset and Liability Changes - Total assets increased to $2,557,149,000 from $2,417,782,000, representing a growth of approximately 5.8% year-over-year[18] - Current liabilities decreased to $486,362,000 from $665,113,000, a reduction of about 26.9%[18] - Total current assets amounted to $1,647,999,000, compared to $1,327,691,000, an increase of about 24.2%[18] - Accounts receivable, net, was reported at $647,448,000, compared to $702,970,000, showing a decrease of approximately 7.9%[18] - Total stockholders' deficit widened to $(1,124,570,000) from $(758,866,000), reflecting a decline in equity[18] - Deferred revenue increased to $23,598,000 from $19,213,000, a rise of approximately 22.4%[18] Strategic Initiatives - Key initiatives include improving machine learning for better content matching and enhancing customer retention strategies[11] - Depop achieved a $1 billion annualized GMS run rate, with plans to accelerate marketing investments to expand its U.S. audience[11] Risks and Management Focus - The company highlighted ongoing risks related to macroeconomic factors and cybersecurity threats that could impact future performance[17] - The management emphasized the importance of enhancing current offerings and developing new products to meet changing market demands[17] Income and Impairment - Net income for the six months ended June 30, 2025, was a loss of $23.3 million, down from a net income of $116.0 million in the same period of 2024[20] - The company incurred an asset impairment charge of $101.7 million for the six months ended June 30, 2025[20]

Core Insights - Etsy, Inc. reported its second quarter results for 2025, highlighting a focus on strengthening customer relationships and enhancing buyer engagement through improved shopping experiences and personalized marketing [2][3][5] Financial Performance - Gross Merchandise Sales (GMS) for Q2 2025 was $2.8 billion, a decrease of 4.8% year-over-year, while revenue increased by 3.8% to $672.7 million [6][7] - The take rate improved to 24.0%, up from 22.0% in the previous year, driven by enhanced Etsy Ads revenue [6][7] - Net income for the quarter was $28.8 million, down from $53.0 million year-over-year, primarily due to a non-cash foreign exchange loss [6][7] - Adjusted EBITDA was $169.0 million, with a margin of 25.1%, reflecting a decline from the previous year [6][7][25] Strategic Initiatives - The company is prioritizing GMS growth through four strategic initiatives: enhancing shopper discovery, improving machine learning for content matching, retaining valuable customers, and amplifying the unique human connection of Etsy [10] - Etsy completed the sale of Reverb on June 2, 2025, which contributed $153.0 million to GMS and $17.6 million to revenue for the first two months of Q2 2025 [3][6] Market Trends - Depop, another marketplace owned by Etsy, reported a GMS of $249.6 million for Q2 2025, marking a 35.3% year-over-year growth [5] - Active buyers decreased by 4.6% year-over-year to 87.3 million, although the company reactivated 6.5 million buyers during the quarter [6][7] Cash Position and Investments - Etsy ended Q2 2025 with $1.5 billion in cash and cash equivalents, following a successful convertible notes offering that raised approximately $700 million [6][7] - The company repurchased approximately $335 million of its stock during the quarter, reflecting confidence in long-term growth opportunities [6][7] Future Guidance - For Q3 2025, Etsy expects GMS to be between $2.6 billion and $2.7 billion, with a take rate of approximately 24.5% and an adjusted EBITDA margin around 25% [9][10]

Group 1 - Etsy, Inc. is set to release its fourth-quarter earnings results on July 30, with analysts expecting earnings of 49 cents per share, an increase from 41 cents per share in the same period last year [1] - Projected quarterly revenue for Etsy is $647.63 million, slightly down from $647.81 million a year earlier [1] - On June 12, Etsy announced a $650 million offering of convertible senior notes [1] Group 2 - Etsy shares experienced a decline of 3.9%, closing at $60.30 [2] - Analysts have provided various ratings and price target adjustments for Etsy, with Stifel maintaining a Hold rating and raising the price target from $45 to $66 [4] - Canaccord Genuity maintained a Buy rating and increased the price target from $62 to $68, while Raymond James raised its Outperform rating target from $50 to $70 [4] - Deutsche Bank maintained a Hold rating with a price target increase from $40 to $47, and UBS raised its Neutral rating target from $45 to $62 [4]

Core Viewpoint - Analysts forecast Etsy (ETSY) will report quarterly earnings of $0.54 per share, reflecting a year-over-year increase of 31.7%, with revenues expected to be $648.01 million, showing no change from the previous year [1]. Earnings Estimates - Over the last 30 days, there has been a 0.7% upward revision in the consensus EPS estimate for the quarter, indicating analysts' reassessment of their initial forecasts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock price performance [3]. Revenue Projections - Analysts project 'Revenue- Services' to reach $189.56 million, representing a year-over-year increase of 6.8% [4]. - The estimated 'Revenue- Marketplace' is $459.65 million, indicating a year-over-year decline of 2.3% [5]. - Total Gross Merchandise Sales (GMS) are expected to be $2.77 million, down from $2.95 million in the same quarter last year [5]. Active User Metrics - Analysts estimate 'Active buyers' will total 94,648, a decrease from 96,610 reported in the same quarter of the previous year [5]. - The consensus for 'Active sellers' is 8,155, down from 8,801 in the same quarter last year [6]. Stock Performance - Shares of Etsy have increased by 23.3% over the past month, outperforming the Zacks S&P 500 composite, which rose by 4.9% [6].