ETSY's Q2 Earnings Miss Estimates, Revenues Increase Y/Y

Earnings Performance - Etsy reported Q2 2024 earnings of 41 cents per share, missing the Zacks Consensus Estimate by 10.9% and reflecting an 8.9% year-over-year decrease [1] - Revenues increased 3% year-over-year to $647.81 million, beating the Zacks Consensus Estimate by 2.3% [1] Revenue Breakdown - Marketplace revenues were $470.38 million (72.6% of total revenues), up 3.8% year-over-year, driven by payments and transaction fee revenue from Offsite Ads [2] - Services revenues were $177.43 million (27.4% of total revenues), up 0.9% year-over-year [3] User Metrics - Etsy acquired 5.6 million new buyers, with total active buyers reaching 91.5 million, a 1% year-over-year increase [2] - Active buyer base grew 0.4% year-over-year to 96.6 million, missing the consensus mark of 97.2 million [4] - Active seller base stood at 8.8 million, up 5.9% year-over-year, but missed the consensus mark of 9.6 million [4] - Reactivated buyers reached 6.4 million, up 8.5% year-over-year [5] Gross Merchandise Sales (GMS) - GMS was $2.95 billion, down 2.1% on a reported basis and 1.9% on a currency-neutral basis year-over-year, beating the Zacks Consensus Estimate of $2.92 billion [5] - Etsy marketplace's GMS was $2.5 billion, down 3.2% on a reported basis year-over-year [5] Operating Performance - Gross margin expanded 160 basis points year-over-year to 71.6% [6] - Total operating expenses decreased 11.1% year-over-year to $393.55 million, representing 60.8% of revenues compared to 70.4% in the prior-year quarter [6] - Operating income was $70.2 million, compared to an operating loss of $2.4 million in the prior-year quarter [6] Balance Sheet - Cash and cash equivalents totaled $759.21 million as of Jun 30, 2024, down from $788.84 million as of Mar 31, 2024 [7] - Short-term investments were $240.68 million, down from $254.88 million in the previous quarter [7] - Long-term debt stood at $2.29 billion at the end of Q2 2024, up from $2.28 billion at the end of the prior quarter [8] Guidance - For Q3 2024, Etsy expects the take rate to be similar to Q2 2024's 22% [9] - GMS is anticipated to decline in the low single-digit range year-over-year [9] - Adjusted EBITDA margin is expected to be 27% [9]