All right, quick mad dash here. Get you to an opening bell for a good old hump day here on this Wednesday. Etsy.>> Yeah. No, I I'm looking for signs of wherever the consumer might be weak. And Josh Silverman is stepping up to executive chair after eight years of being CEO.At the same time, we are seeing weakness in their earnings. Uh it was a not great miss. And I've got to tell you, David, Etsy is either you could say maybe the website's not that good.Uh or you could say, well, maybe people aren't buying a ...

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Financial Data and Key Metrics Changes - Consolidated GMS for the third quarter was $2.72 billion, exceeding guidance, with a year-over-year decline of 2.4% for Etsy Marketplace GMS [22][23] - Consolidated revenue grew 6.1% year-over-year to $678 million, with adjusted EBITDA at $172 million, representing a margin of 25.4% [23][30] - Active buyer count was 86.6 million, down 5% year-over-year, but new and reactivated buyers totaled 11.4 million for the quarter [25][26] Business Line Data and Key Metrics Changes - Etsy Marketplace GMS was down 2.4% year-over-year, while Depop's GMS grew 39.4% year-over-year to $292 million [10][23] - Depop's third quarter growth accelerated by 400 basis points sequentially, driven by new user growth and improved buyer conversion [10][11] - Services revenue grew 12.7% year-over-year, primarily from on-site ad revenue at both Etsy and Depop [29] Market Data and Key Metrics Changes - GMS per active buyer was stable at $121, with encouraging month-by-month improvements in purchase frequency and average item values [25][26] - The app's contribution to total GMS increased to 46%, with app users visiting five times more often than non-app users [28][27] - Strong performance was noted in vintage home and living, jewelry above $100, and wedding rings, with GMS comparisons improving across most top categories [26] Company Strategy and Development Direction - The company is focusing on four strategic priorities: enhancing shopper discovery, deepening loyalty, amplifying seller creativity, and improving the overall shopping experience [12][18] - A partnership with OpenAI aims to leverage AI for personalized shopping experiences, integrating Etsy listings into ChatGPT for seamless transactions [13][40] - The company is reallocating marketing spend towards upper funnel channels like social video and streaming to enhance engagement [15][32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about consumer spending, anticipating a stable macro environment for the holiday season [33][55] - The leadership transition is seen as timely, with new CEO Kruti Patel Goyal expected to drive growth through a focus on creativity and human connection [5][12] - The company expects Q4 consolidated GMS to be between $3.5 billion and $3.65 billion, indicating further sequential improvement [33] Other Important Information - The company completed the sale of Reverb, which impacted year-over-year comparisons [22] - Free cash flow exceeded $200 million in the quarter, with $1.6 billion in cash and investments at the end of the quarter [33] - The company repurchased 2.1 million shares at a cost of approximately $120 million, reducing share count by 17% since December 2023 [33] Q&A Session Summary Question: About the OpenAI partnership and its integration - Management highlighted the excitement around the OpenAI partnership, emphasizing the unique opportunity it presents for Etsy in agentic commerce [38][39] - The integration allows users to purchase items directly through ChatGPT, with Etsy covering the transaction fee for now [40][41] Question: Engagement improvements on the app - Management discussed meaningful investments in reshaping the app's home screen to enhance discovery and engagement, leading to higher user interaction [44][46] Question: Fourth quarter guidance and holiday opportunities - Management indicated uncertainty in consumer health but expects continued progress in initiatives, with a strong holiday campaign planned [53][55][56] Question: Balancing traffic from GenAI platforms versus direct mobile - Management believes that both channels can coexist and benefit Etsy, enhancing brand consideration and app usage [78][81] Question: Investments planned for Depop and margin compression - Management confirmed that the brand campaign for Depop is a long-term investment aimed at expanding awareness, which may compress margins in the near term [79][83]

Financial Data and Key Metrics Changes - Consolidated GMS for the third quarter was $2.72 billion, exceeding the top end of guidance, with a year-over-year decline of 0.9% when excluding Reverb [22][23] - Consolidated revenue grew 6.1% year over year to $678 million, with adjusted EBITDA at $172 million, representing a margin of 25.4% [23][30] - Etsy Marketplace GMS was down 2.4% year over year, but improved by 300 basis points sequentially from Q2 to Q3 [23][24] Business Line Data and Key Metrics Changes - Etsy Marketplace GMS declined 2.4% year over year, while Depop's GMS grew 39.4% year over year to $292 million, driven by new user growth and improved buyer conversion [10][23] - Services revenue increased by 12.7% year over year, primarily due to growth in on-site ad revenue at both Etsy and Depop [29] Market Data and Key Metrics Changes - Active buyer count was 86.6 million, down 5% year over year, but new and reactivated buyers totaled 11.4 million for the quarter, showing slight improvement [25] - GMS per active buyer remained stable at $1.21, with encouraging month-by-month improvements in purchase frequency and average item values [26] Company Strategy and Development Direction - The company is focusing on four strategic priorities: enhancing customer discovery, deepening loyalty, amplifying seller creativity, and leveraging AI for personalization [12][16] - A partnership with OpenAI aims to integrate Etsy listings into ChatGPT, enhancing the shopping experience and increasing brand consideration [13][40] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the consumer environment heading into the holiday season, with expectations for Q4 consolidated GMS between $3.5 billion and $3.65 billion [33][55] - The company is committed to investing in Depop's brand marketing to expand its market presence, which may compress margins in the near term but is seen as a long-term growth opportunity [34][84] Other Important Information - The company has made significant improvements in its app, with app GMS outperforming non-app GMS by 13 percentage points, indicating a positive impact from recent enhancements [16][27] - Seller satisfaction scores have increased by over 10% year over year, reflecting the effectiveness of new AI-powered tools and improved support [19] Q&A Session Summary Question: About the OpenAI partnership and its integration - Management highlighted the excitement around the OpenAI partnership, stating that Etsy listings will be included in the organic experience, with transactions processed through Etsy's payment system [38][40] Question: Engagement improvements on the app - Management discussed meaningful investments in reshaping the app's home screen to enhance discovery, leading to increased engagement metrics [44][46] Question: Fourth quarter guidance and holiday opportunities - Management provided insights on the uncertain consumer outlook for the holiday season, emphasizing the importance of their initiatives in driving sequential improvement [53][55] Question: Balancing traffic from AI platforms versus direct mobile - Management indicated that both channels can coexist and benefit Etsy, with agentic commerce expected to enhance brand consideration [78][82] Question: Investments planned for Depop - Management confirmed that the brand campaign for Depop is a long-term investment aimed at expanding awareness, which may compress margins in the short term but is expected to yield significant growth [79][84]

Financial Data and Key Metrics Changes - Consolidated GMS for Q3 2025 was $2.72 billion, exceeding guidance, with a year-over-year growth of 0.9% when excluding Reverb [26] - Consolidated revenue grew 6.1% year over year to $678 million, with adjusted EBITDA at $172 million, representing a margin of 25.4% [27][36] - Etsy Marketplace GMS declined 2.4% year over year, but improved by 300 basis points sequentially from Q2 to Q3 [27][28] Business Line Data and Key Metrics Changes - Etsy Marketplace GMS was $2.43 billion, down 2.4% year over year, while Depop's GMS grew 39.4% year over year to $292 million [14][27] - Services revenue increased by 12.7% year over year, driven by growth in on-site ad revenue at both Etsy and Depop [32] - Etsy Ads experienced meaningful growth, supported by model enhancements that optimized seller budget pacing and improved ad quality [33] Market Data and Key Metrics Changes - Active buyer count was 86.6 million, down 5% year over year, but new and reactivated buyers totaled 11.4 million for the quarter [29] - GMS per active buyer was stable at $1.21, with encouraging month-by-month improvements in purchase frequency and average item values [30] - The app's contribution to total GMS increased to 46%, with app users visiting five times more often than non-app users [31] Company Strategy and Development Direction - The company is focusing on four strategic priorities: enhancing customer discovery, deepening loyalty, amplifying seller creativity, and leveraging AI for personalization [17][22] - A partnership with OpenAI aims to integrate Etsy listings into ChatGPT, enhancing the shopping experience and driving incremental growth [19][45] - The company is reallocating marketing spend towards upper funnel channels to spark engagement and inspiration, particularly during the holiday season [20][62] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer spending, anticipating a stable macro environment for Q4 [36][60] - The company expects Q4 consolidated GMS to be between $3.5 and $3.65 billion, indicating further sequential improvement [37] - Management highlighted the importance of maintaining profitability while also being willing to invest in growth opportunities, particularly for Depop [65][90] Other Important Information - The company completed the sale of Reverb on June 2, impacting year-over-year comparisons [26] - The transition in leadership from Josh Silverman to Kruti Patel Goyal is set to take place on January 1, 2026, with a focus on continuing growth and innovation [9][10] Q&A Session Summary Question: About the OpenAI partnership and its integration - Management highlighted the excitement around the OpenAI partnership, emphasizing that Etsy listings will be integrated into ChatGPT, allowing seamless transactions through Etsy's payment system [41][45] Question: Engagement improvements on the app - Management discussed meaningful investments in reshaping the app's home screen to enhance discovery, resulting in increased engagement metrics [50][52] Question: Fourth quarter guidance and holiday opportunities - Management noted that while consumer outlook remains uncertain, they expect continued progress in initiatives and a strong holiday campaign focused on the unique value of Etsy [60][62] Question: Balancing traffic from AI platforms versus direct mobile - Management indicated that both channels can coexist and benefit Etsy, with agentic commerce providing additional exposure to potential buyers [87][89] Question: Investments planned for Depop and margin compression - Management confirmed that the brand campaign for Depop is a long-term investment aimed at expanding awareness, which may compress margins in the near term but is expected to yield significant long-term benefits [90][91]

Core Insights - Etsy reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.52 per share, and up from $0.45 per share a year ago, representing an earnings surprise of +21.15% [1] - The company generated revenues of $678.03 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.69% and increasing from $662.41 million year-over-year [2] - Etsy shares have appreciated approximately 41.4% year-to-date, significantly outperforming the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.06 on revenues of $864.44 million, and for the current fiscal year, it is $1.75 on revenues of $2.85 billion [7] - The estimate revisions trend for Etsy was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Internet - Commerce industry, to which Etsy belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Fiverr International, is expected to report quarterly earnings of $0.70 per share, reflecting a year-over-year increase of +9.4%, with revenues projected at $108.04 million, up 8.4% from the previous year [9][10]

OCTOBER 29, 2025 Q3 2025 Financial Results Forward-looking Statements 2 This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include but are not limited to statements relating to: our financial guidance for the fourth quarter of 2025 and underlying assumptions; the impact of AI, ML, and LLMs; the impact of agentic search and our partnership with OpenAI; our product development investments, strategic priorities, and marketing init ...

Etsy CEO Josh Silverman will be replaced by the company's current president and chief growth officer. ...

Etsy said longtime Chief Executive Josh Silverman is stepping down, to be succeeded by President and Chief Growth Officer Kruti Patel Goyal. ...

Financial Performance - Revenue for Q3 2025 reached $678,026,000, a 2.5% increase from $662,410,000 in Q3 2024[24]. - Gross profit for Q3 2025 was $483,381,000, compared to $476,770,000 in Q3 2024, reflecting a slight increase[24]. - Net income for Q3 2025 was $75,503,000, up 31.6% from $57,366,000 in Q3 2024[26]. - Basic net income per share increased to $0.76 in Q3 2025 from $0.50 in Q3 2024, representing a 52% rise[24]. - Total operating expenses for Q3 2025 were $400,670,000, a 2.2% increase from $389,953,000 in Q3 2024[24]. - Marketing expenses rose to $207,841,000 in Q3 2025, up from $196,526,000 in Q3 2024, indicating a 5.7% increase[24]. - Comprehensive income for Q3 2025 was $69,333,000, down from $100,636,000 in Q3 2024[26]. - For the nine months ended September 30, 2025, the company reported a net income of $52.247 million, a decrease from $173.375 million in the same period of 2024[32]. - Revenue for the three months ended September 30, 2025, was $678.0 million, compared to $662.4 million for the same period in 2024, indicating a growth of 2.6%[64]. - Marketplace revenue for the nine months ended September 30, 2025, was $1.394722 billion, slightly down from $1.413434 billion in 2024, representing a decrease of 1.4%[46]. - Services revenue increased to $607.143 million for the nine months ended September 30, 2025, up from $542.736 million in 2024, marking a growth of 11.9%[46]. Assets and Liabilities - As of September 30, 2025, total assets increased to $2,652,811,000 from $2,417,782,000 as of December 31, 2024, representing a growth of approximately 9.7%[23]. - Cash and cash equivalents rose to $1,248,940,000, up from $811,178,000, indicating a significant increase of about 54%[23]. - Total current liabilities decreased to $565,072,000 from $665,113,000, reflecting a reduction of approximately 15%[23]. - Long-term debt increased to $2,980,605,000 from $2,288,083,000, marking an increase of about 30.3%[23]. - The accumulated deficit grew to $(2,380,707,000) from $(1,784,037,000), indicating a worsening of approximately 33.4%[23]. - The company reported a decrease in accounts payable from $25,979,000 to $9,215,000, a reduction of about 64.6%[23]. - Goodwill decreased significantly from $137,089,000 to $38,060,000, a decline of approximately 72.2%[23]. - As of September 30, 2025, the total tangible long-lived assets amounted to $158,408,000, a decrease from $168,698,000 as of December 31, 2024[65]. - The total accrued expenses as of September 30, 2025, were $309,348,000, down from $374,947,000 as of December 31, 2024[73]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025, was $376.290 million, down from $437.510 million in 2024, a decrease of 13.9%[32]. - The company repurchased stock totaling $643.670 million during the nine months ended September 30, 2025, compared to $464.314 million in 2024, an increase of 38.7%[32]. - Cash paid for income taxes, net of refunds, was $47.496 million for the nine months ended September 30, 2025, down from $58.838 million in 2024[33]. - The company's cash equivalents and investments primarily consist of available-for-sale debt securities, with a fair value of $1,015,899,000 as of September 30, 2025[68]. - The company's total investments in short-term and long-term instruments included $663,105,000 in money market funds as of September 30, 2025[68]. Stock and Compensation - The Company repurchased approximately 2.5 million shares of its common stock for $150.0 million in June 2025 under the October 2024 Stock Repurchase Program[100]. - The remaining amount available for repurchase under the October 2024 Stock Repurchase Program as of September 30, 2025, is $356.5 million[96]. - The average price paid per share for repurchases in the three months ended September 30, 2025, was $58.28, with a cumulative total of 12,132 thousand shares repurchased[99]. - The total unrecognized compensation expense related to unvested RSUs is $461.4 million, to be recognized over an estimated weighted-average amortization period of 2.35 years[104]. - Stock-based compensation expense for the three months ended September 30, 2025, totaled $60.772 million, compared to $69.292 million for the same period in 2024, reflecting a decrease of approximately 7.3%[105]. - For the nine months ended September 30, 2025, stock-based compensation expense was $181.390 million, down from $214.692 million in 2024, indicating a decrease of about 15.5%[105]. - The Company granted 5,090 thousand RSUs during the nine months ended September 30, 2025, with a weighted-average grant date fair value of $50.09[104]. Leadership and Strategy - The company has plans to invest in artificial intelligence as part of its growth strategies, aiming to enhance product offerings and market reach[8]. - The company emphasizes the importance of maintaining trustworthy marketplaces to attract and retain active buyers and sellers, which is critical for financial performance[18]. - Future growth strategies include expanding beyond top geographies and addressing barriers to international trade, which may impact overall business growth[18]. - The leadership transition announced on October 29, 2025, will see Josh Silverman step down as CEO effective January 1, 2026, with Kruti Patel Goyal appointed as the new CEO[106]. - The Company adjusted the mix of long-term compensation for certain employees, granting LTC awards to better align employee interests with stockholder goals[102]. Tax and Regulatory - The effective income tax rate for the nine months ended September 30, 2025, was 52.5%, impacted by non-deductible goodwill impairment and other factors[49]. - The company expects certain provisions of the One Big Beautiful Bill Act to favorably change the timing of cash tax payments but does not anticipate a material impact on the provision for income taxes[54]. - The amount of unrecognized tax benefits increased by $2.6 million from $56.8 million as of December 31, 2024, to $59.4 million as of September 30, 2025[52]. - For the nine months ended September 30, 2025, the company recorded interest and penalties of $4.9 million, increasing the cumulative balance from $6.2 million as of December 31, 2024, to $11.1 million as of September 30, 2025[53]. Debt and Financing - The carrying value of the 2025 Notes was $689,323,000, with an estimated fair value of $765,240,000 as of September 30, 2025[72]. - The Company issued $700.0 million of 2025 Notes in June 2025, with net proceeds of $689.5 million after deducting expenses[75]. - Interest expense related to the Notes was $4.4 million for the three months ended September 30, 2025, compared to $2.1 million for the same period in 2024[85]. - The 2023 Credit Agreement provides a $400.0 million senior secured revolving credit facility, maturing in March 2028, with a letter of credit sublimit of $60.0 million[89]. - As of September 30, 2025, the Company had no outstanding borrowings under the 2023 Credit Agreement and was in compliance with all financial covenants[91].