Etsy, Inc. (ETSY) Bundle
A Brief History of Etsy, Inc.
Etsy, Inc. was founded in 2005 as a global online marketplace for handmade, vintage items, and craft supplies. Over the years, it has evolved significantly, expanding its offerings and enhancing its platform to accommodate millions of sellers and buyers worldwide.
Company Growth and Financial Performance
As of September 30, 2024, Etsy has reported a total revenue of $2.0 billion for the nine months ended, reflecting a 2.6% increase compared to $1.9 billion in the same period of 2023. The marketplace revenue was $1.4 billion, representing a 2.3% increase year-over-year, while services revenue rose by 3.4% to $542.7 million.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Total Revenue | $1,956,170 | $1,906,055 | 2.6 |
| Marketplace Revenue | $1,413,434 | $1,381,395 | 2.3 |
| Services Revenue | $542,736 | $524,660 | 3.4 |
Active Sellers and Buyers
As of September 30, 2024, Etsy connects approximately 8.5 million active sellers with 96.7 million active buyers globally. This marks a slight decrease in active sellers from 8.8 million in the previous year, indicating a 3.2% decline, while active buyers decreased by 0.7% from 97.3 million.
Gross Merchandise Sales (GMS)
For the three months ended September 30, 2024, Etsy's GMS was reported at $2.9 billion, down 4.1% from $3.0 billion in the same period in 2023. The nine-month GMS totalled $8.9 billion, reflecting a 3.3% decline from $9.2 billion in 2023.
| Metric | 2024 (3 Months) | 2023 (3 Months) | Change (%) |
|---|---|---|---|
| Gross Merchandise Sales (GMS) | $2,915,256 | $3,039,930 | (4.1) |
Operating Expenses and Net Income
Etsy's operating expenses for the nine months ended September 30, 2024, were $1.2 billion, an increase of 0.5% from $1.17 billion in 2023. The net income for the same period was $173.4 million, a decline of 22.7% compared to $224.3 million in 2023.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Net Income | $173,375 | $224,302 | (22.7) |
| Operating Expenses | $1,174,231 | $1,168,754 | 0.5 |
Cash and Investments
As of September 30, 2024, Etsy had cash and cash equivalents of $818.9 million, down from $914.3 million at the end of 2023. Additionally, the company had $107 million in long-term investments. Positive operating cash flows were reported at $437.5 million for the nine months ended September 30, 2024.
| Metric | 2024 | 2023 |
|---|---|---|
| Cash and Cash Equivalents | $818,939 | $914,323 |
| Long-term Investments | $107,046 | $86,676 |
| Operating Cash Flow | $437,510 | $410,408 |
Debt and Equity Structure
Etsy's long-term debt as of September 30, 2024, stood at $2.29 billion. The company's stock repurchase program has seen a total repurchase of approximately $464.3 million during the nine months ended September 30, 2024.
| Debt Type | Amount |
|---|---|
| Long-term Debt | $2,287,016 |
| Total Stock Repurchased | $464,314 |
A Who Owns Etsy, Inc. (ETSY)
Major Shareholders
As of 2024, Etsy, Inc. (ETSY) has several significant shareholders, including institutional investors and insider ownership. The table below summarizes the major shareholders and their respective ownership percentages.
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 8.5% |
| Institutional Investor | BlackRock, Inc. | 7.9% |
| Institutional Investor | Fidelity Investments | 6.3% |
| Institutional Investor | State Street Corporation | 4.8% |
| Insider | Josh Silverman (CEO) | 1.2% |
| Insider | Other Executives and Directors | 2.5% |
Insider Ownership
Insiders hold a combined total of approximately 3.7% of Etsy's shares. This includes both executives and board members who have a vested interest in the company's performance.
Recent Stock Performance
As of September 30, 2024, Etsy's stock performance reflects a market capitalization of approximately $8 billion, with recent trading prices around $63.42 per share. The company has shown fluctuations in its stock price influenced by broader market conditions and company performance metrics.
Market Capitalization and Financial Metrics
The following table outlines key financial metrics relevant to Etsy's ownership structure and market performance as of Q3 2024.
| Metric | Value |
|---|---|
| Market Capitalization | $8 billion |
| Shares Outstanding | 126 million |
| Net Income (Q3 2024) | $57.4 million |
| Total Revenue (Q3 2024) | $662.4 million |
| Adjusted EBITDA (Q3 2024) | $183.6 million |
| Cash and Cash Equivalents | $1 billion |
Convertible Debt and Other Financial Obligations
Etsy has three outstanding series of convertible notes with a collective net carrying value of approximately $2.3 billion as of September 30, 2024. The details are summarized below:
| Convertible Note Series | Principal Amount | Maturity Date |
|---|---|---|
| 2021 Notes | $1 billion | June 15, 2028 |
| 2020 Notes | $650 million | September 1, 2027 |
| 2019 Notes | $649.9 million | October 1, 2026 |
Conclusion on Ownership and Investment Landscape
Ownership of Etsy, Inc. is characterized by a mix of institutional and insider stakeholders, reflecting confidence in the company's growth potential. The financial metrics indicate a robust operational framework, supported by significant cash reserves and manageable debt levels.
Etsy, Inc. (ETSY) Mission Statement
Etsy, Inc. aims to "Keep Commerce Human." This mission encompasses a commitment to the community of buyers and sellers, ensuring that the marketplace remains a vibrant platform for unique, creative goods. Etsy seeks to empower independent creators by providing them with tools to succeed while fostering a sustainable, socially responsible business model.
Key Financial Metrics
As of September 30, 2024, Etsy reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $662.4 million | $636.3 million | 4.1% |
| Marketplace Revenue | $476.1 million | $460.9 million | 3.3% |
| Services Revenue | $186.3 million | $175.4 million | 6.2% |
| Gross Profit | $476.8 million | $447.5 million | 6.5% |
| Net Income | $57.4 million | $87.9 million | (34.7)% |
| Adjusted EBITDA | $183.6 million | $182.2 million | 0.8% |
Operational Highlights
As of September 30, 2024, Etsy reported:
- Active Sellers: 8.5 million
- Active Buyers: 96.7 million
- Gross Merchandise Sales (GMS): $2.9 billion (Q3 2024)
- GMS for Nine Months: $8.9 billion
- International Transactions: Approximately 46% of GMS came from international sellers or buyers
Market Trends and Challenges
Etsy's marketplace continues to navigate a dynamic macroeconomic environment impacting consumer discretionary spending. Key challenges include:
- Inflationary pressures affecting buyer behavior
- Geopolitical uncertainties
- Competition from other e-commerce platforms
The company has implemented strategic initiatives to enhance seller experiences and improve operational efficiencies, including a workforce reduction plan which resulted in approximately 225 employees being laid off to streamline operations.
Future Outlook
Etsy's focus remains on expanding its marketplace presence globally while continuing to invest in technology and community initiatives to support its mission. The company has also authorized a new stock repurchase program of up to $1 billion as of October 30, 2024.
How Etsy, Inc. (ETSY) Works
Company Overview
Etsy, Inc. operates an online marketplace connecting buyers and sellers of unique goods, including handmade, vintage items, and craft supplies. As of September 30, 2024, Etsy's marketplace had approximately 8.5 million active sellers and 96.7 million active buyers globally.
Financial Performance
In the third quarter of 2024, Etsy reported total revenue of $662.4 million, a 4.1% increase from $636.3 million in Q3 2023. For the nine months ended September 30, 2024, total revenue reached $2.0 billion, up from $1.9 billion in the same period of 2023, marking a 2.6% growth year-over-year.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Change | 9M 2024 | 9M 2023 | Change |
|---|---|---|---|---|---|---|
| Gross Merchandise Sales (GMS) | $2.9 billion | $3.0 billion | (4.1%) | $8.9 billion | $9.2 billion | (3.3%) |
| Total Revenue | $662.4 million | $636.3 million | 4.1% | $2.0 billion | $1.9 billion | 2.6% |
| Net Income | $57.4 million | $87.9 million | (34.7%) | $173.4 million | $224.3 million | (22.7%) |
| Adjusted EBITDA | $183.6 million | $182.2 million | 0.8% | $530.9 million | $518.8 million | 2.3% |
Marketplace Revenue
In Q3 2024, marketplace revenue was $476.1 million, which reflects a 3.3% increase from $460.9 million in Q3 2023. For the nine-month period, marketplace revenue increased to $1.4 billion, compared to $1.4 billion in the prior year.
Active Users and Sales Trends
The decline in GMS was attributed to a decrease in the Etsy marketplace GMS, which was partially offset by an increase in the Depop marketplace GMS. The GMS per active buyer over the trailing twelve months was $123, reflecting a 3.4% decrease year-over-year. The number of active buyers on the Etsy marketplace was 91.2 million, down 0.4% from the previous year.
Operating Expenses
Operating expenses for Q3 2024 totaled $390.0 million, up 8.6% from $358.9 million in Q3 2023. The breakdown of operating expenses includes:
- Marketing: $196.5 million (22.1% increase)
- Product Development: $107.3 million (5.9% decrease)
- General and Administrative: $86.2 million (2.5% increase)
Liquidity and Capital Resources
As of September 30, 2024, Etsy had cash and cash equivalents of $1.0 billion and a net carrying value of convertible notes totaling $2.3 billion. The company also had a $400.0 million senior secured revolving credit facility available.
Stock Performance
For Q3 2024, the net income per share attributable to common stockholders was $0.50 (basic) and $0.45 (diluted). The weighted-average shares outstanding were 114.2 million (basic) and 130.7 million (diluted).
Market Presence
Approximately 46% of Etsy's GMS in Q3 2024 came from international transactions. The company continues to focus on expanding its marketplace in key geographies, leveraging its technological and marketing expertise across its various brands.
How Etsy, Inc. (ETSY) Makes Money
Revenue Streams
Etsy, Inc. generates revenue primarily through two segments: Marketplace revenue and Services revenue.
| Revenue Component | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change (%) | Percentage of Total Revenue (Q3 2024) |
|---|---|---|---|---|
| Marketplace | $476,075 | $460,922 | 3.3% | 71.9% |
| Services | $186,335 | $175,380 | 6.2% | 28.1% |
| Total Revenue | $662,410 | $636,302 | 4.1% | 100% |
Marketplace Revenue Details
The Marketplace revenue is primarily derived from transaction fees on sales made by sellers on Etsy's platform. In Q3 2024, Marketplace revenue increased due to:
- Volume and Pricing: Higher payments revenue due to an expansion of Etsy Payments, which processed 99% of GMS in Q3 2024.
- Seller Set-Up Fee: Introduction of a new seller set-up fee in 2024.
- Transaction Fee Revenue: Growth from offsite advertising.
Services Revenue Insights
Services revenue includes income from advertising and shipping services. In Q3 2024:
- On-Site Advertising Revenue: Increased by 5.4%, driven by a rise in average price per click on Etsy Ads.
- Shipping Label Revenue: Increased by 20.5%, largely attributed to transactions on the Depop marketplace.
Gross Merchandise Sales (GMS)
GMS is a crucial metric for Etsy, representing the total dollar value of items sold. For Q3 2024, GMS was:
| Period | GMS (in millions) | Q3 2023 GMS (in millions) | Change (%) |
|---|---|---|---|
| Q3 2024 | $2,915.3 | $3,039.9 | (4.1%) |
Cost Structure
Etsy's cost of revenue for Q3 2024 was $185,640, a decrease from $188,827 in Q3 2023. This decrease was mainly due to:
- Lower cost of refunds.
- Reduced employee compensation-related expenses following workforce reductions.
Operating Expenses
Operating expenses in Q3 2024 were $389,953, up from $358,919 in Q3 2023. Key components included:
- Marketing Expenses: Increased by 22.1% to $196,526, reflecting higher digital marketing investments.
- Product Development: Decreased by 5.9% to $107,251.
- General and Administrative: Increased by 2.5% to $86,176.
Net Income
In Q3 2024, Etsy reported a net income of $57,366, down from $87,850 in Q3 2023, marking a decline of 34.7%.
Adjusted EBITDA
Adjusted EBITDA for Q3 2024 was $183,587, up slightly from $182,219 in Q3 2023, resulting in an Adjusted EBITDA margin of 27.7% compared to 28.6% in Q3 2023.
Active Buyers and Sellers
As of September 30, 2024, Etsy had:
- Active Sellers: 8.5 million
- Active Buyers: 96.7 million
Financial Position
As of September 30, 2024, Etsy held cash and cash equivalents of $1.0 billion, and had positive operating cash flows of $437.5 million for the nine months ended September 30, 2024.
Conclusion
The financial performance of Etsy illustrates its dual revenue model, reliance on marketplace transactions, and growth in service offerings, while navigating a competitive and changing economic landscape.
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Article updated on 8 Nov 2024
Resources:
- Etsy, Inc. (ETSY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Etsy, Inc. (ETSY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Etsy, Inc. (ETSY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.