Etsy, Inc. Reports Third Quarter 2024 Results
Etsy reported Q3 2024 results with consolidated GMS at $2.9 billion, down 4.1% YoY. Etsy marketplace GMS was $2.5 billion, down 6.0% YoY. Revenue increased by 4.1% to $662.4 million, driven by growth in Marketplace and Services revenue. Net income fell to $57.4 million, a 34.7% decrease YoY, with a net income margin of 8.7%. Adjusted EBITDA was $183.6 million, with a margin of 27.7%. Active buyers decreased by 0.4% to 91.2 million. The Board approved a new $1 billion stock repurchase program. Key initiatives include improving customer experiences, launching a loyalty program, and expanding gifting features. The company ended Q3 with $1.2 billion in cash and investments.
Etsy ha riportato i risultati del terzo trimestre 2024 con un GMS consolidato di 2,9 miliardi di dollari, in calo del 4,1% rispetto all'anno precedente. Il GMS del marketplace Etsy è stato di 2,5 miliardi di dollari, con una diminuzione del 6,0% YoY. I ricavi sono aumentati del 4,1%, raggiungendo i 662,4 milioni di dollari, grazie alla crescita dei ricavi del Marketplace e dei Servizi. Il reddito netto è sceso a 57,4 milioni di dollari, con un calo del 34,7% YoY, e un margine di profitto netto dell'8,7%. L'EBITDA rettificato è stato di 183,6 milioni di dollari, con un margine del 27,7%. Gli acquirenti attivi sono diminuiti dello 0,4%, raggiungendo i 91,2 milioni. Il Consiglio ha approvato un nuovo programma di riacquisto di azioni da 1 miliardo di dollari. Le iniziative principali includono il miglioramento delle esperienze dei clienti, il lancio di un programma di fidelizzazione e l'espansione delle funzionalità di regalo. L'azienda ha concluso il Q3 con 1,2 miliardi di dollari in contanti e investimenti.
Etsy informó los resultados del tercer trimestre de 2024 con un GMS consolidado de 2,9 mil millones de dólares, una disminución del 4,1% en comparación con el año anterior. El GMS del mercado de Etsy fue de 2,5 mil millones de dólares, una disminución del 6,0% YoY. Los ingresos aumentaron un 4,1%, alcanzando los 662,4 millones de dólares, impulsados por el crecimiento de los ingresos del Marketplace y de los Servicios. El ingreso neto cayó a 57,4 millones de dólares, una disminución del 34,7% YoY, con un margen de ingreso neto del 8,7%. El EBITDA ajustado fue de 183,6 millones de dólares, con un margen del 27,7%. El número de compradores activos disminuyó un 0,4%, alcanzando los 91,2 millones. La Junta aprobó un nuevo programa de recompra de acciones de 1 mil millones de dólares. Las iniciativas clave incluyen mejorar la experiencia del cliente, lanzar un programa de lealtad y expandir las características de regalos. La empresa cerró el tercer trimestre con 1,2 mil millones de dólares en efectivo e inversiones.
Etsy는 2024년 3분기 실적을 발표하며 총 GMS가 29억 달러로, 전년 동기 대비 4.1% 감소했다고 밝혔습니다. Etsy 마켓플레이스 GMS는 25억 달러로, 전년 대비 6.0% 감소했습니다. 수익은 4.1% 증가하여 6억 6,240만 달러에 달했으며, 이는 마켓플레이스와 서비스 수익의 성장에 힘입은 결과입니다. 순이익은 5,740만 달러로 떨어져, 전년 대비 34.7% 감소했으며, 순이익률은 8.7%입니다. 조정 EBITDA는 1억 8,360만 달러로, 마진은 27.7%입니다. 활성 구매자는 0.4% 감소하여 9,120만 명이 되었습니다. 이사회는 새로운 10억 달러 규모의 자사주 매입 프로그램을 승인했습니다. 주요 이니셔티브로는 고객 경험 개선, 로열티 프로그램 론칭, 선물 기능 확장이 포함됩니다. 회사는 3분기를 12억 달러의 현금 및 투자 자산으로 마감했습니다.
Etsy a publié ses résultats pour le troisième trimestre 2024, avec un GMS consolidé de 2,9 milliards de dollars, en baisse de 4,1 % par rapport à l'année précédente. Le GMS du marché Etsy a atteint 2,5 milliards de dollars, soit une baisse de 6,0 % YoY. Les revenus ont augmenté de 4,1 %, atteignant 662,4 millions de dollars, grâce à la croissance des revenus du Marketplace et des Services. Le revenu net a chuté à 57,4 millions de dollars, soit une diminution de 34,7 % YoY, avec une marge bénéficiaire nette de 8,7 %. L'EBITDA ajusté était de 183,6 millions de dollars, avec une marge de 27,7 %. Le nombre d'acheteurs actifs a diminué de 0,4 %, atteignant 91,2 millions. Le Conseil a approuvé un nouveau programme de rachat d'actions d'un milliard de dollars. Les principales initiatives comprennent l'amélioration des expériences clients, le lancement d'un programme de fidélité et l'expansion des fonctionnalités de cadeaux. L'entreprise a terminé le Q3 avec 1,2 milliard de dollars en liquidités et en investissements.
Etsy hat die Ergebnisse des dritten Quartals 2024 veröffentlicht, mit einem konsolidierten GMS von 2,9 Milliarden Dollar, was einem Rückgang von 4,1% im Vergleich zum Vorjahr entspricht. Der Etsy-Marktplatz GMS betrug 2,5 Milliarden Dollar, ein Rückgang um 6,0% YoY. Umsatz stieg um 4,1% auf 662,4 Millionen Dollar, angetrieben durch das Wachstum bei Marktplatz- und Service-Umsätzen. Nettogewinn fiel auf 57,4 Millionen Dollar, ein Rückgang um 34,7% YoY, mit einer Nettogewinnmarge von 8,7%. Das bereinigte EBITDA betrug 183,6 Millionen Dollar mit einer Marge von 27,7%. Die aktiven Käufer verringerten sich um 0,4% auf 91,2 Millionen. Der Vorstand genehmigte ein neues Aktienrückkaufprogramm in Höhe von 1 Milliarde Dollar. Zu den wichtigsten Initiativen gehören die Verbesserung der Kundenerfahrungen, die Einführung eines Treueprogramms und die Erweiterung von Geschenkmöglichkeiten. Das Unternehmen beendete das 3. Quartal mit 1,2 Milliarden Dollar an Bargeld und Investitionen.
- Revenue increased by 4.1% to $662.4 million.
- Adjusted EBITDA margin of 27.7%.
- New $1 billion stock repurchase program.
- Growth in both Marketplace and Services revenue.
- Consolidated GMS down 4.1% YoY.
- Etsy marketplace GMS down 6.0% YoY.
- Net income decreased by 34.7% to $57.4 million.
- Active buyers decreased by 0.4%.
Insights
The Q3 results reveal mixed performance with concerning trends in core metrics. GMS declined 4.1% to
Key concerns include:
- Active buyers decreased
0.4% to 91.2M - GMS per active buyer fell
3.4% to$123 - Net income dropped
34.7% to$57.4M
The
The strategic initiatives show promise but face headwinds in execution. The new loyalty program "Etsy Insider" and enhanced gifting features demonstrate efforts to boost engagement, with 1.1M gift lists created. However, the declining GMS per active buyer suggests these initiatives haven't yet translated into increased purchase frequency.
The focus on quality improvements and search visibility could help long-term differentiation, but near-term challenges in discretionary spending persist. The expansion into physical gift cards at major retailers represents a strategic move to capture offline market share and increase brand visibility.
Etsy's Board of Directors Approves a new
"Our third quarter consolidated results came in roughly as anticipated, with some incremental pressure on Etsy marketplace year-over-year GMS, healthy growth in revenue, and continued strength in our adjusted EBITDA profitability," said Josh Silverman, Etsy, Inc. Chief Executive Officer. "We made excellent progress improving Etsy marketplace customer experiences - from Gifting, to Quality, a new loyalty program, investing in our app, and more - all of which we believe will drive engagement and frequency over time. While 2024 has been a challenging period for discretionary goods, we are investing with discipline and focus to make Etsy even more Etsy - which we believe will lift our boat when the tide comes back in again."
Third quarter 2024 performance highlights include:
- Consolidated GMS was
, down$2.9 billion 4.1% year-over-year and down4.4% on a currency-neutral basis. Consolidated GMS performance includes a small headwind from the divestiture of Elo7. - Etsy marketplace GMS was
, down$2.5 billion 6.0% year-over-year and down6.3% on a currency-neutral basis.- We've continued to see year-over-year gifting GMS1 trends outpace sitewide performance and represent a higher share of overall GMS than the same period last year.
- Active buyers decreased
0.4% year-over-year to 91.2 million. - We reactivated 6.4 million buyers, up
5.6% from the prior year period, and acquired 5.3 million new buyers. Our retention of active buyers remains above pre-pandemic levels on a trailing twelve month basis, as does our quarterly new buyer additions. - GMS per active buyer on a trailing twelve month basis for the Etsy marketplace declined
3.4% year-over-year to in the third quarter.$123 - Our number of habitual buyers was 6.8 million, down
4.8% year-over-year. U.S. domestic GMS represented51% of overall GMS and GMS ex-U.S. domestic was49% of overall GMS.
- Consolidated revenue was
, up$662.4 million 4.1% versus the third quarter of 2023, with a take rate (i.e., consolidated revenue divided by consolidated GMS) of22.7% . Our positive revenue growth was driven by growth in both Marketplace and Services revenue, with payments revenue driving Marketplace revenue performance, and Etsy Ads the primary driver of Services revenue growth. - Consolidated net income was
, down$57.4 million year-over-year. Consolidated net income margin (i.e., net income divided by revenue) was approximately$30.5 million 8.7% and diluted net income per share was .$0.45 - Consolidated non-GAAP Adjusted EBITDA was
, with consolidated non-GAAP Adjusted EBITDA margin (i.e., consolidated non-GAAP Adjusted EBITDA divided by consolidated revenue) of approximately$183.6 million 27.7% . - Etsy ended the third quarter with
in cash and cash equivalents and short- and long-term investments. Under Etsy's stock repurchase program, during the third quarter of 2024 Etsy repurchased an aggregate of approximately$1.2 billion , or 2.7 million shares, of its common stock. These shares were purchased pursuant to a 10b5-1 plan.$156 million
"We continue to balance long-term growth investments with delivering strong and sustainable profitability," said Rachel Glaser, Chief Financial Officer. "Third quarter adjusted EBITDA margin was about
Earlier today, Etsy's Board of Directors approved a new stock repurchase program authorizing the repurchase of up to an additional
___________________________________ |
Third Quarter 2024 Financial Summary
(in thousands, except percentages; unaudited)
The financial results of Elo7 have been included in our consolidated financial results ("Consolidated") until August 10, 2023 (date of sale). The unaudited GAAP and non-GAAP financial measures and key operating metrics we use are:
Three Months Ended September 30, | % (Decline) Growth Y/Y | Nine Months Ended September 30, | % (Decline) Growth Y/Y | ||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
GMS (1) | (4.1) % | (3.3) % | |||||||||
Revenue | $ 662,410 | $ 636,302 | 4.1 % | 2.6 % | |||||||
Marketplace revenue | $ 476,075 | $ 460,922 | 3.3 % | 2.3 % | |||||||
Services revenue | $ 186,335 | $ 175,380 | 6.2 % | $ 542,736 | $ 524,660 | 3.4 % | |||||
Gross profit | $ 476,770 | $ 447,475 | 6.5 % | 5.0 % | |||||||
Operating expenses | $ 389,953 | $ 358,919 | 8.6 % | 0.5 % | |||||||
Net income | $ 57,366 | $ 87,850 | (34.7) % | $ 173,375 | $ 224,302 | (22.7) % | |||||
Net income margin | 8.7 % | 13.8 % | (510) bps | 8.9 % | 11.8 % | (290) bps | |||||
Adjusted EBITDA (Non-GAAP) | $ 183,587 | $ 182,219 | 0.8 % | $ 530,897 | $ 518,797 | 2.3 % | |||||
Adjusted EBITDA margin (Non-GAAP) | 27.7 % | 28.6 % | (90) bps | 27.1 % | 27.2 % | (10) bps | |||||
Active sellers (2) | 8,522 | 8,802 | (3.2) % | 8,522 | 8,802 | (3.2) % | |||||
Active buyers (2) | 96,707 | 97,343 | (0.7) % | 96,707 | 97,343 | (0.7) % | |||||
Percent GMS ex- | 46 % | 45 % | 100 bps | 45 % | 45 % | — bps |
(1) | Consolidated GMS for the three and nine months ended September 30, 2024 includes Etsy marketplace GMS of |
(2) | Consolidated active sellers and active buyers includes Etsy marketplace active sellers and active buyers of 6.2 million and 91.2 million, respectively, as of September 30, 2024. Consolidated active sellers and active buyers as of September 30, 2023 includes Elo7 marketplace active sellers and buyers of approximately 52 thousand and 1.5 million as Elo7 was included in our consolidated financial results until August 10, 2023 (the date of sale). |
Third Quarter 2024 Operating Highlights
Etsy
Our "Right to Win" is centered on key elements that we believe make the Etsy marketplace a better place to shop and sell and, which, in turn, will bring more buyers, lead to increased frequency and size of purchases, and build trust in the Etsy marketplace. In 2024, we are focused on building buyer consideration by making it easier to 'find the best stuff' on Etsy, driving association that Etsy sellers offer great value, and making shopping on Etsy more reliable and dependable. The below highlights some of our key initiatives:
Product Highlights:
In order to drive buyer Consideration, we are making progress in our efforts to position Etsy as an indispensable partner for Gifting, with broad based investments positively impacting our performance. We:
- Strengthened the relevance and tripled the number of Gift Ideas available to buyers within Gift Mode since launch. There are now approximately 5,000 suggestions to help inspire buyers and put them on the path to finding the perfect present.
- Increased buyer adoption of existing Gifting features: 1.3 million incremental visits from people who received Gift Teasers and came directly to Etsy, and approximately 1.1 million Gift Lists have been created.
- Launched physical Etsy gift cards at major
U.S. pharmacies and retailers, creating new opportunities to increase consideration. Additionally, starting today,U.S. customers can purchase and ship physical gift cards directly from Etsy.com. U.S. buyer survey data we are tracking for Gifting indicates Etsy's unprompted association with Gifting hit a record high during the third quarter.
To help buyers 'find the best stuff on Etsy,' we invested in the following Quality initiatives:
- Worked to enhance the precision of the application of our new "Creativity Standards" and associated listing descriptors, which show buyers whether items are made, designed, handpicked, or sourced by Etsy sellers.
- Based upon experimentation during the quarter, our efforts to more deeply incorporate listing quality attributes into search appear to be leading to an increase in the number of 4 and 5 star buyer reviews, and a decrease in the rate at which buyers requested refunds – both of which indicate shoppers are becoming happier with their experiences on Etsy.
- Launched the Etsy Search Visibility Page with actionable insights to help sellers improve their positions in search, including insights on listing image quality and quantity, return policies, message response times, and shipping charges for certain listings. So far, we have seen more sellers acting on these insights than we anticipated. For example, providing sellers with information on buyer expectations has contributed to lower shipping charges on approximately 2.5 million items.
- Expanded the diversity of merchandise we are showing buyers, with a goal to reduce the cognitive load experienced when search results deliver too many similar items. Our latest efforts resulted in a
67% reduction in the number of searches with at least four identical listing images on the first page. We are now expanding our capabilities to incorporate items with similar listing images, not just those that feature 'exact matches.'
Aligned with our efforts to make shopping on Etsy more reliable and dependable, we began testing new ways for buyers to access support more easily through prominent support links in user profiles and conversational AI within the Help Center.
We deepened investments in the buy on Etsy app as part of efforts to make the app our marquee shopping experience. We introduced bolder prompts on mobile web, with a focus on driving buyers to download the app.
Due to significant strides made in optimizing how we bid on behalf of our sellers, which resulted in better balancing of seller ad value across seller segments, Etsy Ads revenue performance accelerated on a year-over-year and sequential basis. We also incorporated more features and multimodal embeddings into our ranking models (capturing listing image representations), which led to an improvement in ads conversion rates.
Marketing Highlights:
We invited highly targeted groups of occasional
We ran full funnel marketing campaigns in
We continued to scale mid-funnel paid social channels to diversify our channel portfolio mix. In line with our Quality efforts, we leveraged machine learning models to adjust offsite marketing feeds, making more room for the very best of Etsy by suppressing or removing listings with patterns of poor service quality.
Reverb
- Reverb continues to lean into affordable used and like-new gear for budget-minded musicians:
- Following the launch of the Reverb Outlet in late June, Outlet & Exclusive music gear continues to outperform other inventory categories, seeing double-digit percentage year-over-year growth during a challenging time for the musical instrument industry.
- In August, Reverb and Fender, one of the world's leading guitar manufacturers, launched Fender's first Certified Pre-Owned program. Used gear
U.S. sales on Reverb continue to outpace new music gear sales, and, this program offers musicians professionally inspected pre-owned gear with warranties and easy returns. - Reverb made it easier for sellers to access data on competitive pricing and insights about engagement with their listings, which led to a significant increase in listings sold, as well as price drops and listings published.
Depop
- Depop evolved its
U.S. fee structure, mirroring changes made earlier in the year in theU.K. , which resulted in accelerated momentum for the business in the quarter:- In July, Depop removed selling fees for
U.S. users and introduced a small buyer marketplace fee. We believe this change has made Depop more attractive to sellers, driving a 26 percentage point acceleration inU.S. listings since launch, and offering buyers a wider selection of secondhand fashion. - Depop ran its largest-ever
U.S. marketing campaign, aimed at sharing the refreshed brand message and no selling fees proposition with more than 70 million people.
- In July, Depop removed selling fees for
- Depop also invested in making the listing experience easier through improving the effectiveness of its price guidance, pre-populating key listing attributes using image recognition and generative AI technology, and streamlining the "Repop" process which allows buyers to easily relist items they have previously purchased on Depop.
Consolidated Q4 24 Financial Guidance
Q4 24 Guidance | FY 24 Implied Guidance | |
GMS | We currently anticipate that consolidated Q4 24 | Based upon Q4 24 guidance, for the full year our |
Take Rate | 22.3 % | ~ |
Adjusted EBITDA Margin | 28 | 27.4 |
Please note that our guidance assumes currency exchange rates remain unchanged at current levels.
With respect to our expectations under "Consolidated Q4 24 Financial Guidance" and outlook for the remainder of 2024 above, reconciliation of Adjusted EBITDA margin guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to the charges excluded from Adjusted EBITDA; in particular, stock-based compensation expense, foreign exchange loss (gain), interest and other non-operating income, net, provision (benefit) for income taxes, acquisition, divestiture, and corporate structure-related expenses, and other non-recurring expenses.
Webcast and Conference Call Information
Etsy will host a video webcast conference call to discuss these results at 5:00 p.m. Eastern Time today, which will be live-streamed via our Investor Relations website (investors.etsy.com) under the Events section. A copy of the earnings call presentation will also be posted to our website.
A replay of the video webcast will be available through the same link following the conference call starting at 8:00 p.m. Eastern Time this evening, for at least three months thereafter.
About Etsy
Etsy, Inc. operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world. These marketplaces share a mission to "Keep Commerce Human," and we're committed to using the power of business and technology to strengthen communities and empower people. Our primary marketplace, Etsy.com, is the global destination for unique and creative goods. Buyers come to Etsy to be inspired and delighted by items that are crafted and curated by creative entrepreneurs. For sellers, we offer a range of tools and services that address key business needs.
Etsy, Inc.'s "House of Brands" portfolio also includes fashion resale marketplace Depop, and Reverb, the largest online marketplace dedicated to music gear. Each Etsy, Inc. marketplace operates independently, while benefiting from shared expertise in product, marketing, technology, and customer support.
Etsy was founded in 2005 and is headquartered in
Etsy has used, and intends to continue using, its Investor Relations website and the Etsy News Blog (etsy.com/news) to disclose material non-public information and to comply with its disclosure obligations under Regulation FD. Accordingly, you should monitor our investor relations website and the Etsy News Blog in addition to following our press releases, SEC filings, and public conference calls and webcasts.
Investor Relations Contact:
Deb Wasser, Vice President, Investor Relations and ESG Engagement
Sarah Marx, Director, Investor Relations
ir@etsy.com
Media Relations Contact:
Kelly Clausen, Vice President, Communications & Community
press@etsy.com
Cautionary Statement Regarding Forward-Looking Statements
This press release contains or references forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include statements relating to our financial guidance for the fourth quarter of 2024 and outlook for the full year of 2024 and underlying assumptions; our ability to improve customer engagement and frequency; our ability to invest in strategic growth while delivering on profitability; and the impact of our "Right to Win" strategy and our product development and marketing efforts. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as "aim," "anticipate," "believe," "could," "enable," "estimate," "expect," "goal," "intend," "may," "outlook," "plan," "potential," "target," "will," or similar expressions and derivative forms and/or the negatives of those words.
Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include: (1) the level of demand for our services or products sold in our marketplaces; (2) the importance to our success of the trustworthiness of our marketplaces and our ability to attract and retain active and engaged communities of buyers and sellers; (3) the fluctuation of our quarterly operating results; (4) our failure to meet our publicly announced guidance or other expectations; (5) any real or perceived inaccuracies in our operational metrics; (6) if we or our third-party providers are unable to protect against technology vulnerabilities, service interruptions, security breaches, or other cyber-related events; (7) our dependence on continued and unimpeded access to third-party services, platforms, and infrastructure; (8) macroeconomic events that are outside of our control; (9) operational and compliance risks related to our payments systems; (10) our ability to recruit and retain employees; (11) our ability to compete effectively; (12) enforcement of our marketplace policies; (13) our ability to enhance our current offerings and develop new offerings to respond to the changing needs of sellers and buyers; (14) risks related to our environmental, social, and governance activities and disclosures; (15) our efforts to expand our operations outside of
Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements.
Etsy, Inc. Condensed Consolidated Balance Sheets (in thousands; unaudited) | |||
As of | As of | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 818,939 | $ 914,323 | |
Short-term investments | 226,022 | 236,118 | |
Accounts receivable, net | 8,644 | 24,734 | |
Prepaid and other current assets | 94,514 | 129,884 | |
Funds receivable and seller accounts | 172,562 | 265,387 | |
Total current assets | 1,320,681 | 1,570,446 | |
Property and equipment, net | 242,889 | 249,794 | |
Goodwill | 138,622 | 138,377 | |
Intangible assets, net | 443,943 | 457,140 | |
Deferred tax assets | 144,408 | 137,776 | |
Long-term investments | 107,046 | 86,676 | |
Other assets | 44,617 | 45,191 | |
Total assets | $ 2,442,206 | $ 2,685,400 | |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||
Current liabilities: | |||
Accounts payable | $ 19,589 | $ 29,920 | |
Accrued expenses | 298,995 | 353,553 | |
Finance lease obligations—current | 6,081 | 6,079 | |
Funds payable and amounts due to sellers | 172,562 | 265,387 | |
Deferred revenue | 17,097 | 14,635 | |
Other current liabilities | 38,636 | 41,207 | |
Total current liabilities | 552,960 | 710,781 | |
Finance lease obligations—net of current portion | 95,044 | 99,620 | |
Deferred tax liabilities | 7,101 | 13,192 | |
Long-term debt, net | 2,287,016 | 2,283,817 | |
Other liabilities | 124,385 | 121,705 | |
Total liabilities | 3,066,506 | 3,229,115 | |
Total stockholders' deficit | (624,300) | (543,715) | |
Total liabilities and stockholders' deficit | $ 2,442,206 | $ 2,685,400 |
Etsy, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts; unaudited) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenue | $ 662,410 | $ 636,302 | $ 1,956,170 | $ 1,906,055 | |||
Cost of revenue | 185,640 | 188,827 | 556,863 | 572,918 | |||
Gross profit | 476,770 | 447,475 | 1,399,307 | 1,333,137 | |||
Operating expenses: | |||||||
Marketing | 196,526 | 160,936 | 571,400 | 498,120 | |||
Product development | 107,251 | 113,932 | 331,590 | 351,844 | |||
General and administrative | 86,176 | 84,051 | 271,241 | 250,699 | |||
Asset impairment charges | — | — | — | 68,091 | |||
Total operating expenses | 389,953 | 358,919 | 1,174,231 | 1,168,754 | |||
Income from operations | 86,817 | 88,556 | 225,076 | 164,383 | |||
Other (expense) income, net | (13,007) | 8,411 | 7,366 | 19,269 | |||
Income before income taxes | 73,810 | 96,967 | 232,442 | 183,652 | |||
(Provision) benefit for income taxes | (16,444) | (9,117) | (59,067) | 40,650 | |||
Net income | $ 57,366 | $ 87,850 | $ 173,375 | $ 224,302 | |||
Net income per share attributable to common stockholders: | |||||||
Basic | $ 0.50 | $ 0.72 | $ 1.49 | $ 1.82 | |||
Diluted | $ 0.45 | $ 0.64 | $ 1.34 | $ 1.62 | |||
Weighted-average common shares outstanding: | |||||||
Basic | 114,181 | 121,808 | 116,372 | 123,341 | |||
Diluted | 130,748 | 138,891 | 133,116 | 141,046 |
Etsy, Inc. Condensed Consolidated Statements of Cash Flows (in thousands; unaudited) | |||
Nine Months Ended September 30, | |||
2024 | 2023 | ||
Cash flows from operating activities | |||
Net income | $ 173,375 | $ 224,302 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Stock-based compensation expense | 214,692 | 216,082 | |
Depreciation and amortization expense | 81,672 | 68,290 | |
Provision for expected credit losses | 10,141 | 14,390 | |
Deferred benefit for income taxes | (13,727) | (45,255) | |
Loss on sale of business | — | 2,630 | |
Asset impairment charges | — | 68,091 | |
Other non-cash income, net | (2,066) | (3,786) | |
Changes in operating assets and liabilities (net of impact of sale of business) | (26,577) | (134,336) | |
Net cash provided by operating activities | 437,510 | 410,408 | |
Cash flows from investing activities | |||
Purchases of property and equipment | (10,174) | (7,752) | |
Development of internal-use software | (22,860) | (19,594) | |
Purchases of investments | (266,935) | (288,226) | |
Sales and maturities of investments | 263,210 | 261,589 | |
Net cash used in investing activities | (36,759) | (53,983) | |
Cash flows from financing activities | |||
Payment of tax obligations on vested equity awards | (42,136) | (58,008) | |
Repurchase of stock | (464,314) | (483,987) | |
Proceeds from exercise of stock options | 3,830 | 8,448 | |
Payment of debt issuance costs | — | (2,215) | |
Settlement of convertible senior notes | — | (90) | |
Payments on finance lease obligations | (4,591) | (4,723) | |
Other financing, net | 2,418 | (259) | |
Net cash used in financing activities | (504,793) | (540,834) | |
Effect of exchange rate changes on cash | 8,658 | (252) | |
Net decrease in cash, cash equivalents, and restricted cash | (95,384) | (184,661) | |
Cash, cash equivalents, and restricted cash at beginning of period | 914,323 | 926,619 | |
Cash and cash equivalents at end of period | $ 818,939 | $ 741,958 |
Currency-Neutral GMS Growth
We calculate currency-neutral GMS growth by translating current period GMS for goods sold that were listed in non-
As reported and currency-neutral GMS decline for the periods presented below are as follows:
Quarter-to-Date Period Ended | Year-to-Date Period Ended | ||||||||||
As Reported | Currency- | FX Impact | As Reported | Currency- | FX Impact | ||||||
September 30, 2024 | (4.1) % | (4.4) % | 0.3 % | (3.3) % | (3.5) % | 0.2 % | |||||
September 30, 2023 | 1.2 % | (0.1) % | 1.3 % | (1.4) % | (1.1) % | (0.3) % |
Non-GAAP Financial Measures
Reconciliation of Net Income to Adjusted EBITDA and the Calculation of Adjusted EBITDA Margin
(in thousands, except percentages; unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net income | $ 57,366 | $ 87,850 | $ 173,375 | $ 224,302 | |||
Excluding: | |||||||
Interest and other non-operating income, net | (3,808) | (5,430) | (13,065) | (17,053) | |||
Provision (benefit) for income taxes | 16,444 | 9,117 | 59,067 | (40,650) | |||
Depreciation and amortization | 27,739 | 22,172 | 81,672 | 68,290 | |||
Stock-based compensation expense (1) | 69,292 | 70,118 | 214,692 | 216,082 | |||
Foreign exchange loss (gain) | 16,815 | (5,611) | 5,699 | (4,846) | |||
Acquisition, divestiture, and corporate structure-related expenses | (697) | 1,373 | 1,435 | 1,951 | |||
Asset impairment charges | — | — | — | 68,091 | |||
Loss on sale of business | — | 2,630 | — | 2,630 | |||
Restructuring and other exit costs | 1,556 | — | 1,898 | — | |||
Retroactive non-income tax expense (2) | (1,120) | — | 6,124 | — | |||
Adjusted EBITDA | $ 183,587 | $ 182,219 | $ 530,897 | $ 518,797 | |||
Divided by: | |||||||
Revenue | $ 662,410 | $ 636,302 | $ 1,956,170 | $ 1,906,055 | |||
Adjusted EBITDA margin | 27.7 % | 28.6 % | 27.1 % | 27.2 % |
(1) Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for the periods presented below is as follows: |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Cost of revenue | $ 8,013 | $ 8,105 | $ 24,504 | $ 23,522 | |||
Marketing | 5,690 | 5,763 | 18,009 | 17,132 | |||
Product development | 36,048 | 37,842 | 108,553 | 112,771 | |||
General and administrative | 19,541 | 18,408 | 63,626 | 62,657 | |||
Stock-based compensation expense | $ 69,292 | $ 70,118 | $ 214,692 | $ 216,082 |
(2) Retroactive non-income tax expense related to the digital services tax legislation in |
View original content:https://www.prnewswire.com/news-releases/etsy-inc-reports-third-quarter-2024-results-302291894.html
SOURCE Etsy, Inc.
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