PR Newswire
BROOKLYN, N.Y., May 1, 2024
BROOKLYN, N.Y., May 1, 2024 /PRNewswire/ -- Etsy, Inc. (NASDAQ: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, today announced results for its first quarter ended March 31, 2024.
"Our first quarter performance, while in line with our guidance, was pressured by the challenging environment for consumer discretionary products, which continues to be a headwind to Etsy marketplace growth," said Josh Silverman, Etsy, Inc. Chief Executive Officer. "That said, we are encouraged by the meaningful progress we have made to improve customer experiences that we expect will drive buyer consideration and frequency over time, and we are working with focus and urgency to set the foundation to reignite Etsy marketplace growth. I'm confident that leaning into our differentiators to make Etsy even more Etsy will help ensure we stand out in the sea of sameness in e-commerce."
First quarter 2024 performance highlights include:
1Etsy Gifting GMS: Estimate based upon word 'gift' in the listing title, shipped with a gift message, or other signal the item was purchased as a gift.
2Source: Consumer Edge spend data from sampling of credit card transactions from online 'gifting' peers Zola, Zazzle, Minted, Uncommon Goods, Hallmark, and Mark and Graham.
"On a consolidated basis, our revenue outgrew GMS, and adjusted EBITDA margins were in line with expectations," said Rachel Glaser, Chief Financial Officer. "We believe that our disciplined investment approach and sharp eye on cost management enable us to simultaneously invest in future growth while delivering on profitability. It is encouraging to see continued health in our Etsy marketplace active buyer metric during the first quarter, which remains at record levels - with further improvement in the U.S. and continued growth internationally on a year-over-year basis."
First Quarter 2024 Financial Summary
(in thousands, except percentages; unaudited)
The financial results of Elo7 have been included in our consolidated financial results for the prior year period, as Elo7 was sold on August 10, 2023. The unaudited GAAP and non-GAAP financial measures and key operating metrics we use are:
| Three Months Ended March 31, | | % (Decline) Growth Y/Y | ||
| 2024 | | 2023 | | |
GMS (1) | $ 2,986,500 | | $ 3,101,358 | | (3.7) % |
Revenue | $ 645,954 | | $ 640,877 | | 0.8 % |
Marketplace revenue | $ 466,982 | | $ 467,516 | | (0.1) % |
Services revenue | $ 178,972 | | $ 173,361 | | 3.2 % |
Gross profit | $ 458,821 | | $ 445,424 | | 3.0 % |
Operating expenses | $ 390,731 | | $ 367,225 | | 6.4 % |
Net income | $ 63,004 | | $ 74,537 | | (15.5) % |
Net income margin | 9.8 % | | 11.6 % | | (180) bps |
Adjusted EBITDA (Non-GAAP) | $ 167,935 | | $ 170,344 | | (1.4) % |
Adjusted EBITDA margin (Non-GAAP) | 26.0 % | | 26.6 % | | (60) bps |
| | | | | |
Active sellers (2) | 9,131 | | 7,942 | | 15.0 % |
Active buyers (2) | 96,392 | | 95,526 | | 0.9 % |
Percent GMS ex-U.S. domestic (1) | 45 % | | 45 % | | — bps |
| | | | | |
(1) | Consolidated GMS for the three months ended March 31, 2024 includes Etsy marketplace GMS of $2.6 billion. Percent GMS ex-U.S. domestic for the Etsy marketplace for the three months ended March 31, 2024 was 48%. |
(2) | Consolidated active sellers and active buyers includes Etsy marketplace active sellers and active buyers of 7.0 million and 91.6 million, respectively, as of March 31, 2024. |
First 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. Here are some of our key initiatives from the first quarter.
Etsy recently published a series of blog posts on our Impact activities for 2023, as well as our goals, which can be found on the Etsy News page of our website.
Reverb
Depop
Consolidated Q2 24 Financial Guidance and FY 24 Outlook
| Q2 24 Guidance | FY 24 Outlook |
GMS | The year-over-year decline in consolidated Q2 24 GMS is expected to be similar to actual Q1 24 performance - with the downside being a mid-single-digit decline and the upside being the top end of a low single-digit decline. | With a range of potential outcomes for the full year, our current view suggests a modest acceleration in year-over-year consolidated GMS in the second half.
|
Take Rate | Similar to actual Q1 24 performance. | We expect revenue growth to outpace GMS growth; full year take-rate in line or ahead of present level. |
Adjusted EBITDA Margin | Similar to actual Q1 24 performance. | We continue to expect to maintain very healthy margins, with consolidated Adjusted EBITDA margins for 2024 at least the same as the 2023 result. |
Please note that our guidance assumes currency exchange rates remain unchanged at current levels.
With respect to our expectations under "Consolidated Q2 24 Financial Guidance and FY 24 Outlook" 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 (gain) loss, interest and other non-operating income, net, provision 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 musical instrument marketplace Reverb. Each Etsy, Inc. marketplace operates independently, while benefiting from shared expertise in product, marketing, technology, and customer support.
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