Etsy Q4 Earnings Surpass Expectations, Revenues Rise Y/Y

Core Insights - Etsy's fourth-quarter 2024 earnings per share (EPS) of $1.03 exceeded the Zacks Consensus Estimate by 8.42%, marking a year-over-year increase of 32.05% [1] - However, fourth-quarter revenues rose only 1.2% year over year to $852.16 million, falling short of the Zacks Consensus Estimate by 1.11% [1] Revenue Breakdown - Marketplace revenues accounted for $607.3 million, representing 71.3% of total revenues, which is a decline of 1.4% year over year due to lower gross merchandise sales (GMS) [3] - Services revenues increased by 8.1% year over year to $244.8 million, making up 28.7% of total revenues [4] User Metrics - The active buyer base decreased by 1.1% year over year to 95.5 million, missing the consensus estimate of 96.7 million [5] - The active seller base fell by 10% year over year to 8.1 million, also below the consensus estimate of 9.6 million [5] - Etsy acquired 6.9 million new buyers, with a total of 89.6 million active buyers, down 2.6% year over year [3] Gross Merchandise Sales (GMS) - GMS totaled $3.74 billion, down 6.8% year over year, and missed the Zacks Consensus Estimate of $3.86 billion [6] - The Etsy marketplace's GMS was $3.3 billion, reflecting an 8.6% decline year over year due to a challenging retail environment [6] Operating Expenses - Total operating expenses rose by 1.7% year over year to $479.34 million, with the percentage of revenues decreasing to 56.25% from 58.9% [7] - Marketing expenses increased by 9.2% year over year to $285.2 million, representing 33.5% of sales [7] - Product development expenses decreased by 5.1% year over year to $111.5 million, while general and administrative expenses fell by 10.6% to $82.7 million [8] Operating Income - Etsy reported an operating income of $155.1 million, up from $115.5 million in the prior-year quarter [9] Balance Sheet - As of December 31, 2024, cash and cash equivalents totaled $811.18 million, a slight decrease from $818.94 million as of September 30, 2024 [10] - Long-term debt remained unchanged at $2.29 billion [10] Future Guidance - For Q1 2025, Etsy expects a take rate of 23% and anticipates GMS to decline similarly to the fourth quarter of 2024 [11]