Etsy(ETSY) - 2024 Q2 - Quarterly Results

Financial Performance - Consolidated GMS for Q2 2024 was $2.9 billion, down 2.1% year-over-year, with Etsy marketplace GMS at $2.5 billion, down 3.2% year-over-year[1][2] - Consolidated revenue increased to $647.8 million, up 3.0% compared to Q2 2023, driven primarily by growth in Marketplace revenue[1][2] - Revenue for Q2 2024 was $647.8 million, an increase of 3.0% compared to $628.9 million in Q2 2023[16] - Gross profit for Q2 2024 was $463.7 million, up from $440.2 million in Q2 2023, reflecting a gross margin improvement[16] - Operating expenses for Q2 2024 totaled $393.5 million, a decrease from $442.6 million in Q2 2023, primarily due to lower asset impairment charges[16] - Net income for Q2 2024 was $53.0 million, compared to $61.9 million in Q2 2023, resulting in a diluted earnings per share of $0.41[16] - Net income for the six months ended June 30, 2024, was $116,009, a decrease from $136,452 in the same period of 2023[17] - Total revenue for the six months ended June 30, 2024, was $1,293,760, compared to $1,269,753 in the same period of 2023[22] Buyer Engagement - Active buyers increased by 1.0% year-over-year to 91.5 million, with 6.4 million buyers reactivated, representing an 8.5% increase from the prior year[1][2] - The number of habitual buyers decreased by 3.0% year-over-year to 6.9 million, although retention rates improved slightly[1][2] - The company plans to launch the Etsy Insider Loyalty program in mid-September, aimed at increasing buyer frequency and loyalty[5] Gifting Initiatives - Gifting GMS grew by 4.1% year-over-year, accounting for approximately 27% of total GMS, outperforming select online gifting peers[1][2] - Etsy has made significant investments in Gifting initiatives, including the launch of Gift Mode and a "Made for You" microsite to enhance buyer consideration[3][4] Cash and Investments - Etsy's cash and cash equivalents at the end of Q2 2024 totaled $1.1 billion, with $150 million spent on stock repurchases during the quarter[1][2] - Cash flows from operating activities for the six months ended June 30, 2024, provided $220,094, an increase from $191,902 in the same period of 2023[17] - Net cash used in investing activities for the six months ended June 30, 2024, was $(27,744), an improvement from $(42,713) in the same period of 2023[17] - The company repurchased $308,726 in stock during the six months ended June 30, 2024, compared to $187,037 in the same period of 2023[17] Future Outlook - For Q3 2024, consolidated GMS is expected to decline in the low single-digit range year-over-year, with an adjusted EBITDA margin around 27%[8] - Etsy plans to continue investing in strategic growth initiatives while focusing on profitability and buyer engagement through new quality initiatives[12] - The company is committed to expanding its operations outside of the United States, leveraging its "Right to Win" strategy[13] Market Position - Etsy's marketplaces, including Depop and Reverb, operate independently while benefiting from shared expertise in product and marketing[11] Adjusted Metrics - Adjusted EBITDA for Q2 2024 was $179.4 million, with an adjusted EBITDA margin of approximately 27.7%, up 130 basis points year-over-year[1][2] - Adjusted EBITDA for the three months ended June 30, 2024, was $179,375, compared to $166,235 in the same period of 2023, reflecting an increase in operating performance[22] - Adjusted EBITDA margin for the six months ended June 30, 2024, was 26.8%, slightly up from 26.5% in the same period of 2023[22] Balance Sheet - Total current assets as of June 30, 2024, were $1.36 billion, down from $1.57 billion as of December 31, 2023[15] - Total liabilities decreased to $3.08 billion as of June 30, 2024, from $3.23 billion as of December 31, 2023[15] - The company reported a total stockholders' deficit of $635.0 million as of June 30, 2024, compared to a deficit of $543.7 million at the end of 2023[15]