Etsy's second quarter revenue exceeded $620 million, with 91 million active buyers

It is learned that according to foreign media reports, on Tuesday (August 2), Etsy announced its second-quarter results ending June 30, 2023.

“Etsy’s active buyers hit an all-time high in the second quarter, demonstrating the relevance of our brand and our ability to create opportunities for our sellers,” said Etsy CEO Josh Silverman. “This growth in buyers helped our gross merchandise sales (GMS) return to year-over-year growth in May and June, and this trend continued into the early third quarter.”

Financial Highlights

• Consolidated GMS was US$3 billion, down slightly by 0.6% year-on-year. Excluding the impact of exchange rate changes, it was down 0.4% year-on-year.

• Etsy's market GMS was US$2.6 billion, down 0.7% year-on-year. Excluding the impact of exchange rate changes, it was down 0.4% year-on-year.

• The number of active buyers increased 3% year-over-year to an all-time high of 91 million. Etsy added 6 million new buyers and the number of reactivated buyers increased 21% compared to the same period last year.

• In the second quarter, GMS per active buyer on the Etsy marketplace fell 6% year-over-year to $128.

• Etsy's international market (excluding the United States) GMS accounted for 47% of the total GMS, and its share increased by 5% year-on-year.

• Consolidated revenues reached $628.9 million, up 7.5% compared to the second quarter of 2022.

• Consolidated net income was $6,190, a decrease of $1,120 year-over-year. The decrease was due to a $6,810 impairment charge related to property and equipment and intangible assets of Elo7, partially offset by a $15 million related tax benefit.

• The consolidated net profit margin (calculated as net profit divided by revenue) was approximately 9.8%, and the net profit per diluted share was $0.45.

• Non-GAAP (U.S. Generally Accepted Accounting Principles) adjusted EBITDA was $166.2 million, and non-GAAP adjusted EBITDA margin was approximately 26.4%.

• Etsy had $1.2 billion in cash and cash equivalents and short-term and long-term investments at the end of the second quarter.

• The company also repurchased approximately $39 million, or 411,421 shares of its common stock during the quarter as part of its stock repurchase program. On June 14, 2023, Etsy's Board of Directors authorized a new $1 billion repurchase program.

Business Highlights

During the quarter, Etsy focused on enhancing its search and discovery capabilities to provide a more curated and organized platform. Several initiatives during the quarter had a positive impact on average order value, such as incorporating Etsy's curated listings into search results for weddings, vintage items, and special occasions.

Etsy has improved the shopping experience for buyers by prioritizing useful product details and highly rated reviews in the "Recommendations" filter and adding an organized shopping path based on perceived tasks on the homepage, further increasing product conversion rates.

Etsy has made significant progress in building category experiences and brand connections in home & living, fashion, and gifting purchase occasions.

The addition of a curated “Shop the Look” section to the homepage’s “Home & Living” section and the launch of the “Etsy Registry” (to be expanded in August) also helped drive sales for these brands through the “Etsy has it” campaign.

To ensure reliability and sustainability, Etsy has added a “local delivery badge” to product listings in the U.S. In addition to improving the buyer experience and increasing conversion rates, this move is also an important part of the company’s plan to achieve net zero emissions by 2030.

Etsy Ads was once again a key driver of revenue growth. This quarter, Etsy used multiple data retrieval systems to improve the relevance of paid advertising, including the integration of real-time retrieval engine XWalk. Etsy drives seller sales and builds long-term buyer relationships by providing sellers with tools and insights, such as the "Make an Offer" feature.

Etsy’s marketing efforts include customer relationship management (CRM) initiatives that bring buyers back to the platform to complete more shopping tasks. Performance marketing investments expanded to non-core countries, resulting in a significant increase in new buyer acquisition.

Etsy attracted a large number of buyers through its partnership with artist John Legend and the Etsy Design Awards. The company made progress in its impact strategy, including the success of Etsy's Uplift Makers program, being named a "Best Workplace for Disability Inclusion" by Disability:IN, and releasing the Human Rights Commitment as part of its broader impact strategy.

Performance Outlook:

Etsy's guidance for third quarter 2023 consolidated GMS, revenue, and adjusted EBITDA margin is:

• GMS: $2.95 billion to $3.1 billion

• Revenue: $610 million to $645 million

• Adjusted EBITDA margin: 27-28%

Editor ✎ Nicole/

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