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]