Loading...
01/11 03:24
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook. Financial performance shows slight growth in revenue and services, but GMS and marketplace revenue declined. The Q&A reveals cautious optimism about future growth, particularly in marketing and product personalization. However, management's avoidance of specifics on macroeconomic impacts and gross margin headwinds adds uncertainty. Share repurchases and strong cash flow are positives, but the lack of clear guidance and external pressures suggest a neutral sentiment for stock movement.
Consolidated GMS $2.8 billion, down approximately 6.5% year-over-year due to external pressures on consumer discretionary spending and FX headwinds.
Etsy Marketplace GMS Down 8.9% year-over-year, down 8.1% on a currency neutral basis, reflecting a challenging environment and a shift in resources and strategy.
Consolidated Revenue $651 million, increased by approximately 1% year-over-year, driven by increases in payments revenue and seller setup fees, partially offset by a decline in Marketplace revenue.
Marketplace Revenue Decreased 1.8% year-over-year, reflecting the decline in GMS, but partially offset by increases in payments revenue and seller setup fees.
Services Revenue Grew 7.7% year-over-year, with strong growth in on-site ads revenue at both Etsy and Depop.
Adjusted EBITDA $171 million, representing a 26.3% margin, up 30 basis points year-over-year, primarily due to leverage in G&A and a reduction in bad debt.
Consolidated Take Rate Improved to 23.3%, an increase of 170 basis points over the 21.6% take rate reported in the same period last year, reflecting the value delivered to marketplace participants.
Free Cash Flow $35 million generated in the quarter, with a trailing 12-month free cash flow of $685 million, indicating strong cash generation capabilities.
Share Repurchases Allocated $189 million to share repurchases during the quarter, supported by nearly $1 billion in cash at the end of the period.
GMS per Buyer $120, declined 3.5% year-over-year, driven by a decrease in frequency of purchases.
Marketing Spend Decreased 1% year-over-year to $189 million, with a shift from brand spend to performance marketing.
Product Development Spending Slightly up year-over-year to $111 million, remaining flat as a percentage of revenue.
New App Features: Etsy has launched a new shop tab in its app to enhance browsing and navigation across categories, improving the overall customer experience.
Discovery Centric Shopping Experience: On April 9th, Etsy introduced a new shopping experience that utilizes AI-driven curation to present personalized collections based on shopper trends and preferences.
GenAI Marketing: Etsy tested GenAI-created personalized marketing copy in Q1, aiming to enhance engagement and drive sales.
Gifting Initiatives: Etsy's gifting initiatives have shown positive results, with gifting GMS outperforming non-gifting GMS during key shopping periods.
Depop Growth: Depop achieved its best GMS quarterly performance since acquisition, driven by strong growth in the U.S. market.
Operational Task Force: Etsy established a task force to address the impact of global tariff regulations on its community and operations.
Increased App Engagement: The app's buyer conversion rate increased year-over-year, with app GMS reaching 44.5% of total marketplace GMS.
Divestiture of Reverb: Etsy announced the sale of Reverb for $105 million to focus on growth for Etsy and Depop.
Leadership Changes: Kruti Patel Goyal has transitioned to President and Chief Growth Officer, bringing fresh perspectives to Etsy's growth strategy.
Macroeconomic Conditions: Etsy is navigating through unprecedented and dynamic times, indicating potential risks associated with changing macroeconomic conditions that could impact consumer discretionary spending.
Supply Chain Resilience: Despite previous global economic and supply chain shocks, Etsy's diverse seller base and operational model have shown resilience, but ongoing supply chain challenges remain a concern.
Tariff Regulations: The shifting global tariff landscape poses risks, particularly with potential impacts on consumer spending and demand for discretionary items, as well as the uncertainty surrounding the de minimis exemption.
Competitive Pressures: Etsy faces competitive pressures that could affect its market position, especially as customer behavior shifts and the need for differentiation increases.
Consumer Demand: Higher tariffs may impact consumer demand, influencing overall expenditures and discretionary spending, which could adversely affect Etsy's GMS.
Financial Performance: Etsy reported a decline in GMS and active buyer metrics, indicating challenges in maintaining growth amidst external pressures.
Product Investments: Etsy is executing a balanced portfolio of product investments to drive in-year GMS improvement and evolve the overall customer experience.
AI and Machine Learning: Etsy is leveraging AI and machine learning to enhance personalization and buyer engagement, including personalized browsing experiences and improved data collection.
Mobile App Enhancements: The mobile app's design improvements have led to increased buyer conversion rates and significant growth in app GMS.
Gifting Initiatives: Etsy's gifting initiatives have shown positive buyer response, contributing to improved discovery and sales.
Depop Growth: Depop has achieved strong top-line growth and record seller acquisition, indicating successful marketplace strategies.
Reverb Divestment: Etsy has decided to divest Reverb to focus on growth for Etsy and Depop.
Q2 2025 GMS Outlook: Etsy anticipates Q2 2025 consolidated GMS to decline at a rate similar to or slightly better than the 6.5% decline in Q1 2025.
Q2 2025 Take Rate: Expected Q2 2025 consolidated take rate to be similar to Q1 2025's 23.3%.
Q2 2025 Adjusted EBITDA Margin: Expected adjusted EBITDA margin for Q2 2025 to be approximately 25%.
Free Cash Flow: Etsy generated $35 million in free cash flow in Q1 2025, with a trailing 12-month total of $685 million.
Share Repurchases: Etsy allocated $189 million to share repurchases in Q1 2025, indicating strong financial flexibility.
Share Repurchase: During the first quarter, Etsy allocated $189 million to repurchase its shares.
The earnings call highlights strong financial performance, strategic product development, and positive market strategy, especially with AI and app improvements. While there are concerns about profitability and vague management responses, the optimistic guidance and loyalty program enhancements suggest a positive outlook. The lack of market cap data limits precise prediction, but overall sentiment leans positive.
Etsy's earnings call reveals strong financial health with significant share repurchases and free cash flow generation. Product and app enhancements, along with AI initiatives, drive user engagement and spending. Despite a slight decline in GMS, positive guidance and strategic investments suggest future growth. The Q&A section highlights improved spending, margin management, and successful marketing strategies. While management was vague on some specifics, overall sentiment is positive, expecting a 2% to 8% stock price increase.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
