Key TakeawaysShares of online retailer Etsy fell Wednesday after revenue and sales on the platform came in below estimates in the fourth quarter.Revenue hit a quarterly record, but fell short of expectations as gross merchandise sales declined year-over-year.The company also expects GMS to decline in the first quarter "at a rate similar" to the nearly 7% drop it saw in the fourth quarter. Etsy (ETSY) shares slumped on Wednesday morning after the online selling platform's revenue and number of active buyers ...

Financial Performance - Etsy's sellers generated $12.6 billion of Gross Merchandise Sales (GMS) in 2024, with the Etsy marketplace contributing $10.9 billion (86.4% of total GMS) and Reverb and Depop generating approximately $917.9 million (7.3%) and $788.9 million (6.3%) respectively[32]. - Etsy's GMS declined 6% in 2024 to $10.9 billion, while the broader e-commerce sector experienced growth[51]. - In 2024, Etsy's revenue growth was driven by advancements in Etsy Ads, expanded payment platform coverage, and a new seller onboarding fee[52]. - Etsy estimates a $550 billion online market opportunity in relevant retail categories, with its GMS representing approximately 2% of that market[54]. - In 2024, Etsy's active buyers averaged three purchase days per year, indicating a significant opportunity to increase purchase frequency[48]. - GMS (Gross Merchandise Sales) per active buyer declined by 3.5% from 2023 to 2024, indicating challenges in buyer frequency and average order value[121]. Seller and Buyer Engagement - As of December 31, 2024, Etsy connected 8.1 million active sellers to 95.5 million active buyers, with 89.6 million buyers and 5.6 million sellers active on the Etsy marketplace[33][38]. - Approximately 30% of the 2024 GMS was derived from custom or made-to-order merchandise, highlighting the unique offerings of Etsy's sellers[36]. - The top six retail categories on the Etsy marketplace in 2024 accounted for approximately $9 billion, or 87% of total GMS, including homewares, jewelry, apparel, craft supplies, paper supplies, and toys[34]. - In 2024, Etsy reactivated nearly 29 million lapsed buyers from a pool of over 100 million[59]. - Approximately 48% of active buyers were repeat buyers in 2024, consistent with levels observed since 2020[131]. - Habitual buyers, defined as those spending $200 or more and purchasing on six or more days, comprised 7% of active buyers and accounted for 41% of 2024 GMS[132]. Marketing and Advertising - Etsy's performance marketing accounted for 21% of GMS in 2024, with significant investments in paid social marketing increasing from 17% to 22% of performance marketing spend[85][86]. - Revenue from the Offsite Ads program offset approximately 31% of the Etsy marketplace's performance marketing spend in 2024[87]. - In 2024, Etsy spent approximately $546 million on performance marketing and $172 million on brand marketing[84]. - Depop's marketing strategies in 2024 included a focus on performance marketing channels, resulting in its best-ever year in paid GMS[92]. Technology and Innovation - Etsy's strategy includes enhancing search and discovery through AI and machine learning to improve buyer experience and drive sales[37]. - Etsy's investment in technology infrastructure includes significant enhancements in machine learning and AI to improve customer experiences and streamline operations[78]. - The Etsy Search Visibility Page launched in mid-2024, providing sellers with actionable tips to improve their search rankings[104]. Sustainability and Social Responsibility - Etsy aims for a 50% reduction in absolute Scope 1 and 2 greenhouse gas emissions by 2030, with a 33% reduction achieved as of 2024[151]. - Shipping emissions accounted for 54% of reported Scope 3 emissions in 2024, with a 12% intensity reduction relative to 2023[156]. - Etsy invested $1 million in 2024 from its Impact Investment Fund to support socially disadvantaged farmers through Iroquois Valley Farm's Rooted in Regeneration Notes[163]. - In 2024, Etsy made over $5.6 million in philanthropic donations to support equal access to economic opportunities[148]. - The company offset its reported Scope 1, 2, and 3 emissions in 2024 by investing in 478,566 verified emissions reductions (VERs)[161]. Employee Engagement and Diversity - Engagement scores from employee surveys showed 65% for Etsy, 66% for Reverb, and 76% for Depop, indicating varying levels of employee engagement across the brands[109]. - As of December 31, 2024, 51.5% of Etsy's global employees identified as women or marginalized genders, and 14.9% of U.S. employees identified as Black, Latinx, or Native American[187]. - 35.7% of all global employees identified as women or marginalized genders as of December 31, 2024[193]. - 20.2% of U.S. employees identified as Black, Latinx, Native American, Asian, and two or more races as of December 31, 2024[193]. - Etsy is committed to enhancing its supply chain diversity and transparency, aiming for a more resilient supply chain[212]. Market Opportunities - In 2024, Reverb's GMS was $918 million, down 2.6% from 2023, but performed slightly better than the overall musical instrument industry[64]. - The total available market opportunity for musical instruments is approximately $24 billion, with Reverb holding less than 5% market share, indicating significant potential for market share gains[67]. - Depop's Gross Merchandise Sales (GMS) reached $789 million in 2024, growing by 31.6% year-over-year, with growth accelerating throughout the year[70]. - The global secondhand apparel market is forecasted to grow to an estimated $350 billion by 2028, with the U.S. resale market expected to reach about $44 billion[73].

Company Performance - Etsy reported quarterly earnings of $1.03 per share, exceeding the Zacks Consensus Estimate of $0.95 per share, and up from $0.78 per share a year ago, representing an earnings surprise of 8.42% [1] - The company posted revenues of $852.16 million for the quarter ended December 2024, which missed the Zacks Consensus Estimate by 1.11%, but was an increase from $842.32 million year-over-year [2] - Over the last four quarters, Etsy has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Outlook - The immediate price movement of Etsy's stock will largely depend on management's commentary during the earnings call and the sustainability of the earnings surprise [3] - Etsy shares have increased approximately 8.2% since the beginning of the year, outperforming the S&P 500's gain of 4% [3] - The current consensus EPS estimate for the upcoming quarter is $0.48 on revenues of $660.16 million, and for the current fiscal year, it is $2.60 on revenues of $2.9 billion [7] Industry Context - The Internet - Commerce industry, to which Etsy belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Etsy's stock performance [5] - Another company in the same industry, Groupon, is expected to report a quarterly loss of $0.06 per share, reflecting a year-over-year change of -120% [9]

Core Insights - Etsy reported mixed Q4 2024 earnings with record revenue of $852.2 million, a 1.2% increase year over year, but below the $861.8 million estimate by analysts. The earnings per share (EPS) of $1.03 exceeded the consensus forecast of $0.93, marking a 66% increase from $0.62 in Q4 2023 [1][2]. Financial Performance - Q4 2024 metrics include: - EPS: $1.03, exceeding estimates of $0.93, up 66% from $0.62 in Q4 2023 [2] - Revenue: $852.2 million, slightly up 1.2% from $842.3 million in Q4 2023, but below the $861.8 million estimate [2] - Net income: $129.9 million, a 56% increase from $83.3 million in Q4 2023 [2] - Adjusted EBITDA: $250.6 million, a 6.4% increase from $235.5 million in Q4 2023, with a margin of 29.4% [2][7] Business Model and Market Position - Etsy operates as a digital marketplace connecting artisans and consumers, focusing on unique, handmade, or vintage items, emphasizing personalization and human connection [3]. - The company is expanding its market share domestically and internationally, particularly in the gifting sector, leveraging technological advancements for enhanced search and personalization [4]. Gross Merchandise Sales (GMS) Insights - GMS for Q4 2024 declined by 6.8% to $3.7 billion, attributed to reduced consumer spending on non-essential goods. However, the subsidiary Depop achieved record GMS figures since its acquisition, indicating strategic growth in the re-commerce space [5]. Community Engagement - Etsy experienced a 2.6% decrease in active buyers and a 10% drop in active sellers. Despite this, the company successfully re-engaged 9.8 million lapsed buyers and attracted nearly 6.9 million new buyers, demonstrating effective customer retention efforts [6]. Technological Initiatives - The company is prioritizing marketplace enhancements through artificial intelligence (AI) and personalized shopping experiences, with initiatives like the Etsy Insider loyalty program aimed at increasing purchase frequency [8]. Future Outlook - For Q1 2025, Etsy management anticipates a continued decline in GMS similar to Q4 2024, with a projected take rate of about 23% and an adjusted EBITDA margin between 25%-26%, reflecting ongoing strategic initiatives to enhance buyer engagement and accelerate GMS growth [9][10].

[Fourth Quarter and Full Year 2024 Results](index=1&type=section&id=Etsy%2C%20Inc.%20Reports%20Fourth%20Quarter%20and%20Full%20Year%202024%20Results) [Performance Highlights](index=1&type=section&id=Performance%20Highlights) In Q4 2024, Etsy achieved its highest-ever quarterly revenue of $852.2 million, a 1.2% YoY increase, despite a 6.8% decline in consolidated GMS to $3.7 billion, while net income saw a significant 56.0% YoY rise to $129.9 million, demonstrating strong profitability and cash flow that enabled the repurchase of 4.9 million shares for $260 million Q4 2024 Key Performance Metrics (in millions) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Consolidated GMS | $3.7 billion | -6.8% | | Etsy Marketplace GMS | $3.3 billion | -8.6% | | Consolidated Revenue | $852.2 million | +1.2% | | Consolidated Net Income | $129.9 million | +56.0% | | Diluted Net Income per Share | $1.03 | - | | Consolidated non-GAAP Adj. EBITDA | $250.6 million | - | | Active Buyers | 89.6 million | -2.6% | | Habitual Buyers | 6.4 million | -9.5% | - Revenue growth was primarily driven by Services revenue, with **Etsy Ads** being the main contributor due to improved bidding algorithms[4](index=4&type=chunk) - The company ended the year with **$1.2 billion** in cash and investments and repurchased **$260 million** of its common stock in Q4[4](index=4&type=chunk) - Depop's GMS reached its highest level since its acquisition in 2021, with full-year GMS growth of **31.6%**, benefiting from US share gains and re-commerce trends[4](index=4&type=chunk) [Financial Summary](index=2&type=section&id=Fourth%20Quarter%20and%20Full%20Year%202024%20Financial%20Summary) For the full year 2024, Etsy's consolidated GMS was $12.6 billion, a 4.4% decrease YoY, while revenue grew 2.2% to $2.8 billion, and net income slightly decreased by 1.4% to $303.3 million, though Adjusted EBITDA increased by 3.6% to $781.5 million, with the margin expanding by 40 basis points to 27.8% Full Year 2024 vs 2023 Financial Results (in thousands) | Metric | FY 2024 | FY 2023 | YoY Change | | :--- | :--- | :--- | :--- | | GMS | $12,586,952 | $13,161,196 | -4.4% | | Revenue | $2,808,332 | $2,748,377 | +2.2% | | Gross Profit | $2,033,778 | $1,919,702 | +5.9% | | Net Income | $303,281 | $307,568 | -1.4% | | Adjusted EBITDA | $781,538 | $754,311 | +3.6% | Q4 2024 vs Q4 2023 Financial Results (in thousands) | Metric | Q4 2024 | Q4 2023 | YoY Change | | :--- | :--- | :--- | :--- | | GMS | $3,735,942 | $4,007,404 | -6.8% | | Revenue | $852,162 | $842,322 | +1.2% | | Gross Profit | $634,471 | $586,565 | +8.2% | | Net Income | $129,906 | $83,266 | +56.0% | | Adjusted EBITDA | $250,641 | $235,514 | +6.4% | [Business & Operating Highlights](index=2&type=section&id=Business%20%26%20Operating%20Highlights) Throughout 2024, Etsy focused on enhancing the user experience by improving search algorithms, revamping the homepage, and launching a beta loyalty program, with Q4 initiatives including using machine learning to shorten estimated delivery dates, expanding marketing campaigns, and improving subsidiary platforms like Depop and Reverb [Etsy Marketplace - Full Year 2024 Initiatives](index=2&type=section&id=Etsy%20Marketplace%20-%20Full%20Year%202024%20Initiatives) - Expanded merchandise diversity in search results by incorporating high-quality listing indicators into algorithms[7](index=7&type=chunk) - Revamped the homepage to focus on inspiration and deepened investment in the Etsy app, which now accounts for **42% of 2024 GMS**[7](index=7&type=chunk) - Introduced 'Etsy Insider,' a new beta loyalty program to drive purchase frequency, and implemented a shop set-up fee to reduce fraudulent onboarding[7](index=7&type=chunk) [Fourth Quarter 2024 Initiatives](index=3&type=section&id=Fourth%20Quarter%202024%20Initiatives) - **Product:** Implemented machine learning for estimated delivery dates, making the average EDD over two days sooner for US domestic orders during the peak holiday season[11](index=11&type=chunk) - **Marketing:** Ran full-funnel marketing campaigns, curated 'on sale' shopping experiences with Etsy-funded promotions, and expanded gift card offerings[11](index=11&type=chunk) - **Support:** Expanded the use of conversational AI in support channels to significantly scale availability for the community[11](index=11&type=chunk) [Subsidiary Marketplace Highlights (Depop & Reverb)](index=3&type=section&id=Subsidiary%20Marketplace%20Highlights%20%28Depop%20%26%20Reverb%29) - **Depop:** New listing growth accelerated in Q4 following the removal of seller fees and introduction of buyer fees in the US and UK[8](index=8&type=chunk) - **Reverb:** Outlet & Exclusive categories showed strong performance with double-digit percentage YoY GMS growth during the holiday season[11](index=11&type=chunk) [Business Outlook](index=3&type=section&id=Business%20Outlook) [First Quarter 2025 Financial Guidance](index=3&type=section&id=Consolidated%20First%20Quarter%202025%20Financial%20Guidance) For the first quarter of 2025, Etsy anticipates a consolidated GMS decline similar to the rate seen in Q4 2024, projecting a take rate of approximately 23% and an Adjusted EBITDA margin between 25% and 26% Q1 2025 Guidance | Metric | Guidance | | :--- | :--- | | GMS | Decline rate similar to Q4 2024's YoY performance (-6.8%) | | Take Rate | ~23% | | Adjusted EBITDA Margin | ~25-26% | [2025 Strategic Focus](index=3&type=section&id=2025%20Strategic%20Focus) In 2025, Etsy is moving with urgency to return to GMS growth by increasing buyer engagement and sales, with a core strategy to infuse 'Discovery' more deeply into the marketplace to create more personalized and joyful shopping experiences, while management remains committed to maintaining a strong bottom line and healthy free cash flow - The company is focused on increasing buyer engagement and driving more sales to return to GMS growth[9](index=9&type=chunk) - A key strategy is to infuse 'Discovery' more deeply into the marketplace to create more personalized and resonant user experiences[9](index=9&type=chunk) - Management believes several factors should position the Etsy marketplace for improved GMS performance beyond Q1 2025[9](index=9&type=chunk) [Financial Statements and Non-GAAP Reconciliations](index=6&type=section&id=Financial%20Statements%20and%20Non-GAAP%20Reconciliations) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2024, Etsy reported total assets of $2.42 billion, down from $2.69 billion in the prior year, with total liabilities standing at $3.18 billion, resulting in a total stockholders' deficit of $758.9 million, and cash and cash equivalents at $811.2 million Key Balance Sheet Items (in thousands) | As of December 31, | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $811,178 | $914,323 | | Total current assets | $1,327,691 | $1,570,446 | | Total assets | $2,417,782 | $2,685,400 | | Total current liabilities | $665,113 | $710,781 | | Long-term debt, net | $2,288,083 | $2,283,817 | | Total liabilities | $3,176,648 | $3,229,115 | | Total stockholders' deficit | ($758,866) | ($543,715) | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the full year 2024, Etsy generated $2.81 billion in revenue and $2.03 billion in gross profit, with income from operations at $380.2 million and net income at $303.3 million, resulting in diluted net income per share of $2.35, up from $2.24 in 2023 Key Statement of Operations Items - Full Year (in thousands) | Year Ended December 31, | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | $2,808,332 | $2,748,377 | | Gross profit | $2,033,778 | $1,919,702 | | Income from operations | $380,208 | $279,841 | | Net income | $303,281 | $307,568 | | Diluted EPS | $2.35 | $2.24 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the full year 2024, net cash provided by operating activities was $752.5 million, while the company used $53.1 million in investing activities and $787.2 million in financing activities, primarily driven by $723.9 million in stock repurchases, resulting in a net decrease in cash of $103.1 million Key Cash Flow Items - Full Year (in thousands) | Year Ended December 31, | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $752,469 | $705,513 | | Net cash used in investing activities | ($53,101) | ($73,307) | | Net cash used in financing activities | ($787,168) | ($656,533) | | Net decrease in cash | ($103,145) | ($12,296) | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) For the full year 2024, Etsy reconciled a net income of $303.3 million to a non-GAAP Adjusted EBITDA of $781.5 million, resulting in an Adjusted EBITDA margin of 27.8%, with the currency-neutral GMS decline for FY 2024 being 4.5%, slightly worse than the reported 4.4% decline, indicating a minor positive impact from foreign exchange rates Reconciliation of Net Income to Adjusted EBITDA - Full Year (in thousands) | Year Ended December 31, | 2024 | 2023 | | :--- | :--- | :--- | | Net Income | $303,281 | $307,568 | | Stock-based compensation | $282,847 | $284,558 | | Depreciation & amortization | $108,074 | $91,323 | | **Adjusted EBITDA** | **$781,538** | **$754,311** | | Adjusted EBITDA margin | 27.8% | 27.4% | Currency-Neutral GMS Growth | Period Ended Dec 31, 2024 | As Reported | Currency Neutral | FX Impact | | :--- | :--- | :--- | :--- | | Q4 2024 | (6.8)% | (6.9)% | 0.1% | | FY 2024 | (4.4)% | (4.5)% | 0.1% | [Cautionary Statement Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) - This section warns that statements in the press release, particularly financial guidance and strategic outlooks, are not guarantees of future performance and involve substantial risks and uncertainties[18](index=18&type=chunk)[19](index=19&type=chunk) - Key risks cited include fluctuations in operating results, failure to meet guidance, ability to retain buyers and sellers, cybersecurity incidents, competition, and evolving legal and regulatory requirements[19](index=19&type=chunk)

Etsy (ETSY 3.40%) is down over 81% off its high, providing an excellent opportunity for long-term investors.*Stock prices used were the afternoon prices of Feb. 12, 2025. The video was published on Feb. 14, 2025. ...

Core Insights - Analysts project Etsy (ETSY) will report quarterly earnings of $0.95 per share, reflecting a year-over-year increase of 21.8% [1] - Revenue is expected to reach $862.01 million, marking a 2.3% increase from the same quarter last year [1] Earnings Estimates - Over the last 30 days, the consensus EPS estimate has been revised upward by 1.3%, indicating a collective reassessment by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [3] Revenue Projections - The consensus estimate for 'Revenue- Services' is $234.20 million, representing a 3.4% increase from the prior-year quarter [4] - 'Revenue- Marketplace' is expected to be $627.37 million, indicating a 1.9% increase from the prior-year quarter [5] Key Metrics - Total GMS is projected to reach $3.86 million, down from $4.01 million a year ago [5] - Active buyers are forecasted to be 96,724, slightly up from 96,483 in the same quarter last year [5] - The estimate for 'Percent GMS ex-U.S. Domestic' is 46.9%, compared to 45% a year ago [6] - Active sellers are expected to total 9,612, an increase from 9,035 a year ago [6] Market Performance - Etsy shares have returned -0.9% over the past month, while the Zacks S&P 500 composite has increased by 3.9% [6] - With a Zacks Rank 3 (Hold), Etsy is anticipated to perform in line with the overall market in the near future [6]

Wall Street expects a year-over-year increase in earnings on higher revenues when Etsy (ETSY) reports results for the quarter ended December 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on February 19. On t ...

Since the start of 2023, the S&P 500 has put up a ridiculous total return of 62%. That's an unbelievable gain that's well above historical norms for the widely followed benchmark.Unfortunately, not all businesses have benefited from the bullish sentiment. In fact, there's one e-commerce company whose shares trade at a gut-wrenching 82% below their peak, which was established in November 2024. There are still reasons to be optimistic, though. Here's why you should buy this growth stock right now.A value prop ...

BROOKLYN, N.Y., Feb. 5, 2025 /PRNewswire/ -- Etsy, Inc. (Nasdaq: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, plans to release its fourth quarter and year end 2024 financial results before the opening of the market on Wednesday, February 19, 2025. The press release can be accessed on the Etsy Investor Relations website (investors.etsy.com).Etsy will also host a video webcast conference call to discuss those results ...