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Marketplace revenues were $615.8 million (73.1% of the total revenues), up 2.6% from the year-ago quarter’s level, driven by solid momentum across buyers. ETSY acquired 8.4 million new buyers, which was a major positive. The total number of active buyers on Etsy’s marketplace stood at 92 million, which increased 3% year over year.
Services revenues were $226.53 million (26.9% of the total revenues), up 9.4% on a year-over-year basis. Etsy ads acted as a key driver of revenue growth.
Quarterly Specifics
Etsy’s active buyer base increased 1.5% from the prior-year quarter’s figure to 96.48 million, which missed the consensus mark of 97.41 million.
The active seller base stood at 9.04 million, up 21% year over year. The figure topped the consensus mark of 8.81 million. Increasing investments to support sellers with new tools and insights, including the Etsy Share & Save program and a new 'Pricing Guide' for sustainable pricing strategies, had a positive effect on seller base growth.
ETSY witnessed solid momentum in buyer reactivation. Reactivated buyers were 9.7 million, up 13% year over year.
Gross merchandise sales (GMS) of $4.01 billion were down 0.7% on a reported basis and 1.6% on a currency-neutral basis from the prior-year quarter. The reported figure surpassed the Zacks Consensus Estimate of $3.97 billion.
The Etsy marketplace’s GMS was $3.6 billion, down 1.4% on a reported basis from the year-ago quarter’s figure.
GMS Ex-U.S. domestic for the Etsy marketplace rose 4% from the prior-year quarter’s figure on a currency-neutral basis and accounted for 47% of the total GMS.
Operating Details
In fourth-quarter 2023, gross margin was 69.6%, which contracted 240 basis points year over year.
Total operating expenses were $471.1 million, up 6.6% from the prior-year quarter. As a percentage of revenues, the figure expanded to 55.9% from 54.8% in the year-ago quarter.
Consequently, ETSY reported an operating income of $115.46 million compared with an operating income of $139.34 million reported in the prior-year quarter.
Balance Sheet & Cash Flows
As of Dec 31, 2023, cash and cash equivalents totaled $914.32 million, which increased from $741.96 million as of Sep 30, 2023.
Short-term investments were $236.12 million, up from $234.93 million in the previous quarter.
Long-term debt stood at $2.28 billion at the end of the fourth quarter, which remained flat compared with the figure at the end of the prior quarter.
In fourth-quarter 2023, the company generated $295.1 million in cash from operations, up from $218.5 million in the previous quarter.
Guidance
For first-quarter 2024, Etsy anticipates the take rate to be between 21% and 21.5%. This can be used to estimate the revenue range for the quarter.
GMS is expected to decline in the low-single-digit range on a year-over-year basis. However, if trends worsen, that could become a mid-single-digit decline year over year.
The adjusted EBITDA margin is expected to be approximately 26%.
Image: Bigstock
ETSY's Q4 Earnings Meet Estimates, Revenues Increase Y/Y
Etsy, Inc. (ETSY - Free Report) reported fourth-quarter 2023 earnings of 62 cents per share, which declined 19.5% year over year.
In the reported quarter, the company’s net income, totaling $83.3 million, was hurt by restructuring and other exit costs of $27 million.
The adjusted bottom-line figure was 78 cents per share, which was in line with the Zacks Consensus Estimate.
Revenues advanced 4.3% year over year to $842.32 million. The figure beat the Zacks Consensus Estimate by 1.8%.
Top-line growth was driven by accelerating marketplace and services revenues.
Strong momentum across active sellers and reactivated buyers remained positive.
Etsy, Inc. Price, Consensus and EPS Surprise
Etsy, Inc. price-consensus-eps-surprise-chart | Etsy, Inc. Quote
Top Line in Detail
Marketplace revenues were $615.8 million (73.1% of the total revenues), up 2.6% from the year-ago quarter’s level, driven by solid momentum across buyers. ETSY acquired 8.4 million new buyers, which was a major positive. The total number of active buyers on Etsy’s marketplace stood at 92 million, which increased 3% year over year.
Services revenues were $226.53 million (26.9% of the total revenues), up 9.4% on a year-over-year basis. Etsy ads acted as a key driver of revenue growth.
Quarterly Specifics
Etsy’s active buyer base increased 1.5% from the prior-year quarter’s figure to 96.48 million, which missed the consensus mark of 97.41 million.
The active seller base stood at 9.04 million, up 21% year over year. The figure topped the consensus mark of 8.81 million. Increasing investments to support sellers with new tools and insights, including the Etsy Share & Save program and a new 'Pricing Guide' for sustainable pricing strategies, had a positive effect on seller base growth.
ETSY witnessed solid momentum in buyer reactivation. Reactivated buyers were 9.7 million, up 13% year over year.
Gross merchandise sales (GMS) of $4.01 billion were down 0.7% on a reported basis and 1.6% on a currency-neutral basis from the prior-year quarter. The reported figure surpassed the Zacks Consensus Estimate of $3.97 billion.
The Etsy marketplace’s GMS was $3.6 billion, down 1.4% on a reported basis from the year-ago quarter’s figure.
GMS Ex-U.S. domestic for the Etsy marketplace rose 4% from the prior-year quarter’s figure on a currency-neutral basis and accounted for 47% of the total GMS.
Operating Details
In fourth-quarter 2023, gross margin was 69.6%, which contracted 240 basis points year over year.
Total operating expenses were $471.1 million, up 6.6% from the prior-year quarter. As a percentage of revenues, the figure expanded to 55.9% from 54.8% in the year-ago quarter.
Consequently, ETSY reported an operating income of $115.46 million compared with an operating income of $139.34 million reported in the prior-year quarter.
Balance Sheet & Cash Flows
As of Dec 31, 2023, cash and cash equivalents totaled $914.32 million, which increased from $741.96 million as of Sep 30, 2023.
Short-term investments were $236.12 million, up from $234.93 million in the previous quarter.
Long-term debt stood at $2.28 billion at the end of the fourth quarter, which remained flat compared with the figure at the end of the prior quarter.
In fourth-quarter 2023, the company generated $295.1 million in cash from operations, up from $218.5 million in the previous quarter.
Guidance
For first-quarter 2024, Etsy anticipates the take rate to be between 21% and 21.5%. This can be used to estimate the revenue range for the quarter.
GMS is expected to decline in the low-single-digit range on a year-over-year basis. However, if trends worsen, that could become a mid-single-digit decline year over year.
The adjusted EBITDA margin is expected to be approximately 26%.
Zacks Rank & Stocks to Consider
Etsy currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Agilent Technologies (A - Free Report) , ACM Research (ACMR - Free Report) and Bandwidth (BAND - Free Report) , each carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Agilent Technologies shares have declined 2.7% year to date. A is scheduled to release first-quarter 2024 results on Feb 27.
ACM Research shares have declined 2.1% year to date. ACMR is set to report its fourth-quarter 2023 results on Feb 28.
Bandwidth shares have declined 8.2% year to date. BAND is set to report its fourth-quarter 2023 results on Feb 28.