Etsy's third quarter was strong, but sellers are suffering?

It is learned that on November 2, US time, the American handicraft e-commerce platform Etsy released its third-quarter performance report. Data showed that Etsy's Q3 revenue was US$2.6 billion, a year-on-year decrease of 3.8%, and an increase of 0.2% after deducting the impact of foreign exchange.

Total revenue across all Etsy platforms was $3 billion, down 3.3% year-over-year and up 0.7% excluding foreign exchange impacts. Etsy said its GMS results were impacted by macro headwinds, including reopenings, pressure on consumer discretionary spending, foreign exchange rate fluctuations, and ongoing geopolitical events.

Highlights from the third quarter 2022 results include:

Consolidated GMS was $3.0 billion, down 3.3% year-over-year and up 0.7% on a currency-neutral basis. GMS performance was impacted by macro headwinds, including reopenings, pressure on discretionary consumer spending, foreign exchange rate fluctuations, and ongoing geopolitical events.

Etsy marketplace GMS was $2.6 billion, down 3.8% year over year and up 134% compared to the third quarter of 2019. On a currency-neutral basis, Etsy marketplace GMS increased 0.2%.

The Etsy marketplace acquired approximately 6 million new buyers , and the new buyer acquisition rate continues to increase significantly compared to pre-pandemic levels.

Non-U.S. GMS on the Etsy marketplace accounted for 44% of total GMS and grew 9% year-over-year on a currency-neutral basis.

Consolidated revenue was $594.5 million , up 11.7% compared to the third quarter of 2021, with an adoption rate (i.e., consolidated revenue divided by consolidated GMS) of 19.8%. This revenue performance includes the increase in Etsy marketplace transaction fees effective April 11, 2022.

Net loss was $963.1 million , a decrease of $1.1 billion year-over-year, reflecting goodwill impairment charges totaling $1.0 billion at Depop and Elo7. Diluted loss per share was $(7.62), of which $(8.20) was the impact of the impairment charges.

Non-GAAP Adjusted EBITDA was $167.8 million , and Non-GAAP Adjusted EBITDA margin (i.e., Non-GAAP Adjusted EBITDA divided by Consolidated Revenue) was 28%, a decrease of 500 basis points compared to the third quarter of 2021.

Etsy ended the third quarter with $1.1 billion in cash and cash equivalents and short-term and long-term investments . Under Etsy's stock repurchase program, during the third quarter of 2022, Etsy repurchased a total of approximately $151 million, or 1,503,505 shares of its common stock.

Etsy's revenue growth was driven in part by fee increases in April, with the company reporting an 11.7% increase in consolidated revenue compared to the third quarter of 2021. The sales-to-revenue ratio suggests that, overall, sellers are paying more in fees for fewer sales.

Seller advertising fees also drove Etsy's revenue growth, and Etsy Ads continued to be an important driver of service revenue growth. Etsy's CEO pointed out that in a turbulent market environment, Etsy's strong performance proved its unique position in the e-commerce field.

Editor✎ Ashley/

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