Consolidated results came in at the high end
or ahead of guidance for key performance metrics
BROOKLYN, N.Y., July 31,
2024 /PRNewswire/ -- Etsy, Inc. (NASDAQ: ETSY), which
operates two-sided online marketplaces that connect millions of
passionate and creative buyers and sellers around the world, today
announced results for its second quarter ended June 30,
2024.
"We are pleased that second quarter consolidated results
included sequential acceleration of Etsy marketplace year-over-year
GMS, higher consolidated revenue both year-over-year and
sequentially, and strong adjusted EBITDA profitability," said
Josh Silverman, Etsy, Inc. Chief
Executive Officer. "Gifting is proving to be a winning theme -
driving growth as a key source of differentiation for Etsy. We are
making excellent progress with other bold moves and investments
meant to raise consideration among buyers - to help us stand apart
more than ever. While this is a challenging environment for our
type of goods, we are focused on reigniting Etsy marketplace growth
and gaining market share."
Second quarter 2024 performance highlights include:
- Consolidated GMS was $2.9
billion, down 2.1% year-over-year and down 1.9% on a
currency-neutral basis. Consolidated GMS included a small headwind
from the divestiture of Elo7.
- Etsy marketplace GMS was $2.5
billion, down 3.2% year-over-year and down 2.9% on a
currency-neutral basis.
- Gifting GMS1 was up 4.1% year-over-year,
representing approximately 27% of GMS, significantly outperforming
select online gifting focused peers.2
- Active buyers increased 1.0% year-over-year to 91.5 million,
largely flat on a sequential basis, and we continued to see
year-over-year growth in international active
buyers.
- We reactivated 6.4 million buyers, up 8.5% from the prior
year period, and acquired 5.6 million new buyers. Our retention of
active buyers remains above pre-pandemic levels on a trailing
twelve month basis.
- While GMS per active buyer on a trailing twelve month
basis for the Etsy marketplace declined 3.2% year-over-year to
$124 in the second quarter, trends in
this metric continued to stabilize on a sequential basis.
- Our number of habitual buyers was 6.9 million, down 3.0%
year-over-year, although our retention rate of habitual buyers was
slightly better on a year-over-year basis.
- U.S. domestic GMS represented 52% of overall GMS and GMS
ex-U.S. domestic was 48% of overall GMS.
- Consolidated revenue was $647.8
million, up 3.0% versus the second quarter of 2023, with a
take rate (i.e., consolidated revenue divided by consolidated GMS)
of 22.0%. Our positive revenue growth was primarily driven by
growth in Marketplace revenue, primarily driven by payments revenue
and transaction fee revenue from Offsite Ads.
- Consolidated net income was $53.0
million, down $8.9 million
year-over-year, reflecting a $7.2
million retroactive non-income tax expense. Consolidated net
income margin (i.e., net income divided by revenue) was
approximately 8.2% and diluted net income per share was
$0.41.
- Consolidated non-GAAP Adjusted EBITDA was $179.4 million, with consolidated non-GAAP
Adjusted EBITDA margin (i.e., consolidated non-GAAP Adjusted EBITDA
divided by consolidated revenue) of approximately 27.7%.
- Etsy ended the second quarter with $1.1 billion in cash and cash equivalents and
short- and long-term investments. Under Etsy's stock repurchase
program, during the second quarter of 2024 Etsy repurchased an
aggregate of approximately $150
million, or 2.4 million shares, of its common stock. These
shares were purchased pursuant to a 10b5-1 plan.
"We are investing in strategic growth areas including Gifting,
highlighting the best of Etsy through Quality initiatives,
launching a new Loyalty Program, expanding our App, and more, while
also carefully managing expenses to deliver very healthy profit,"
said Rachel Glaser, Chief Financial
Officer. "In fact, second quarter adjusted EBITDA was about 28%,
ahead of our guidance and up 130 bps from last year, as we gained
leverage year-over-year on employee costs and cost of revenue,
which was partially offset by higher level of performance marketing
investments to help fuel buyer growth and frequency. The Etsy
marketplace's record level of active buyers has held up quite well,
and we added approximately 12 million new and reactivated buyers
during the quarter."
______________________________________
|
1 Etsy Gifting GMS: Estimate based upon
word 'gift' in the listing title, shipped with a gift message, or
other signal the item was purchased as a gift.
|
2 Source: Consumer Edge
spend data from sampling of credit card transactions from online
'gifting' peers Zola, Zazzle, Minted, Uncommon Goods, Hallmark, and
Mark and Graham.
|
Second Quarter 2024 Financial Summary
(in
thousands, except percentages; unaudited)
The financial results of Elo7 have been included in our
consolidated financial results for the prior year periods, as Elo7
was sold on August 10, 2023. The
unaudited GAAP and non-GAAP financial measures and key operating
metrics we use are:
|
Three Months
Ended
June
30,
|
|
%
(Decline)
Growth
Y/Y
|
|
Six Months
Ended
June
30,
|
|
%
(Decline)
Growth
Y/Y
|
|
2024
|
|
2023
|
|
|
2024
|
|
2023
|
|
GMS (1)
|
$ 2,949,254
|
|
$ 3,012,504
|
|
(2.1) %
|
|
$ 5,935,754
|
|
$ 6,113,862
|
|
(2.9) %
|
Revenue
|
$
647,806
|
|
$
628,876
|
|
3.0 %
|
|
$ 1,293,760
|
|
$ 1,269,753
|
|
1.9 %
|
Marketplace
revenue
|
$
470,377
|
|
$
452,957
|
|
3.8 %
|
|
$
937,359
|
|
$
920,473
|
|
1.8 %
|
Services
revenue
|
$
177,429
|
|
$
175,919
|
|
0.9 %
|
|
$
356,401
|
|
$
349,280
|
|
2.0 %
|
Gross profit
|
$
463,716
|
|
$
440,238
|
|
5.3 %
|
|
$
922,537
|
|
$
885,662
|
|
4.2 %
|
Operating
expenses
|
$
393,547
|
|
$
442,610
|
|
(11.1) %
|
|
$
784,278
|
|
$
809,835
|
|
(3.2) %
|
Net income
|
$ 53,005
|
|
$ 61,915
|
|
(14.4) %
|
|
$
116,009
|
|
$
136,452
|
|
(15.0) %
|
Net income
margin
|
8.2 %
|
|
9.8 %
|
|
(160)
bps
|
|
9.0 %
|
|
10.7 %
|
|
(170)
bps
|
Adjusted EBITDA
(Non-GAAP)
|
$
179,375
|
|
$
166,235
|
|
7.9 %
|
|
$
347,310
|
|
$
336,578
|
|
3.2 %
|
Adjusted EBITDA margin
(Non-GAAP)
|
27.7 %
|
|
26.4 %
|
|
130
bps
|
|
26.8 %
|
|
26.5 %
|
|
30 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
Active sellers
(2)
|
8,801
|
|
8,312
|
|
5.9 %
|
|
8,801
|
|
8,312
|
|
5.9 %
|
Active buyers
(2)
|
96,610
|
|
96,250
|
|
0.4 %
|
|
96,610
|
|
96,250
|
|
0.4 %
|
Percent GMS ex-U.S.
domestic (1)
|
45 %
|
|
45 %
|
|
— bps
|
|
45 %
|
|
45 %
|
|
— bps
|
|
|
(1)
|
Consolidated GMS for
the three and six months ended June 30, 2024 includes Etsy
marketplace GMS of $2.5 billion and $5.1 billion, respectively.
Percent GMS ex-U.S. domestic for the Etsy marketplace for both the
three and six months ended June 30, 2024 was 48%.
|
(2)
|
Consolidated active
sellers and active buyers includes Etsy marketplace active sellers
and active buyers of 6.6 million and 91.5 million, respectively, as
of June 30, 2024.
|
Second Quarter 2024 Operating Highlights
Etsy
Our "Right to Win" is centered on key elements that we
believe make the Etsy marketplace a better place to shop and sell
and, which, in turn, will bring more buyers, lead to increased
frequency and size of purchases, and build trust in the Etsy
marketplace. In 2024, we are focused on building buyer
consideration by making it easier to 'find the best stuff'
on Etsy, driving association that Etsy sellers offer great
value, and making shopping on Etsy more reliable and
dependable. The below highlights some of our key
initiatives:
Product Highlights:
In order to drive buyer Consideration, we are making
progress in our efforts to position Etsy as an indispensable
partner for Gifting, with broad based investments positively
impacting our performance:
- We reported single-digit year-over-year growth in U.S. GMS for
Mother's Day and Father's Day, and double-digit year-over-year
growth for graduations, another important second quarter gifting
occasion.
- U.S. buyer survey data we are tracking for Gifting indicates we
are making solid progress. For example, we saw a significant
year-over-year increase in prompted consideration of Etsy as a
destination for gifts. We are also tracking an increase in consumer
perception that Etsy makes it easy to find a great gift, a survey
question we introduced more recently, in connection with the launch
of Gift Mode.
- Gift Mode is now available everywhere Etsy operates globally,
and in ten languages.
- Product enhancements for the quarter included the addition of
Lists and Reminders, Occasion Pages (ex: anniversary, birthday,
etc.), and Gift Teaser Video Messages.
- We built integration for third party sales of Etsy Gift Cards
aligned with our overall Gifting strategy.
We launched a "Made for You" microsite to increase consideration
and help buyers get the most out of shopping on Etsy. It features
our latest product improvements, including Gift Mode, the Deals
Tab, the Etsy's Picks badge, and Etsy Purchase Protection. The
microsite was launched globally in June, is available in 11
languages, and has already attracted hundreds of thousands of
users.
To help buyers 'find the best stuff on Etsy,' we invested in the
following Quality initiatives:
- As announced on July 9th, we made
a series of updates across our seller policies and the shopping
experience in order to shine a brighter spotlight on our sellers'
work, be even clearer about Etsy's rules, and reinforce what Etsy
stands for and why we are different and special. We introduced new
"Creativity Standards," which categorize what's allowed on Etsy
based on a sellers' role in the creative process. We're also more
clearly showing buyers how sellers are involved in their items by
adding clearer descriptors to listing pages indicating whether they
are made, designed, handpicked, or sourced by a
seller. Along with these important changes to our marketplace, we
launched a new homepage as well as full funnel marketing campaigns
in the United States and
United Kingdom, which feature real
Etsy sellers and highlight our unique positioning.
- We expanded the diversity of merchandise we are showing buyers,
with a goal to reduce the cognitive load experienced when search
results deliver too many similar items. Recent search advances
expanded the diversity of both sellers and items that we are
showing per query. For example, our work resulted in an
approximately 50% decline in the percent of searches where a high
percentage of listings seen on page one are from a single seller;
and an over 70% reduction in the number of searches that have two
or more listings that may appear identical.
Aligned with our efforts to make shopping on Etsy more
reliable and dependable, and also to drive international
growth, we recently secured a new preferred shipping partnership
with a third party to simplify cross-border logistics for Turkish
sellers. We continued to expand Etsy Payments globally, with about
98% of our GMS now processed through our platform.
We worked to continue to build trust in our marketplace
with a roll out of our new seller set-up fee in additional regions.
This fee, meant to strengthen our new shop onboarding process, and
in combination with added trust and safety enforcement - resulted
in a significant decline in fraudulent onboarding, while continuing
to provide ample access for creative entrepreneurs to start
businesses on Etsy.
Marketing Highlights:
We further developed plans to launch our new Etsy Insider
Loyalty program, currently scheduled to be introduced in
invitation-only beta form to targeted occasional Etsy U.S. buyers
in mid-September. Etsy Insider will be buyer-fee based,
offering free U.S. domestic shipping on millions of items, item
discounts, first access merchandise and other benefits, with a goal
to drive frequency and loyalty over time.
We now manage all of Etsy's paid search campaigns in-house,
enabling us to reallocate the significant external costs of
managing these campaigns directly into the campaigns
themselves.
To support our U.S. sellers, we launched a targeted marketing
campaign to promote the availability of a seller financing program
offered via a third party partner. We've observed strong initial
engagement from the campaign signaling interest and need for
additional capital among our seller community.
Etsy's Creator Collective program, which incentivizes creators
and influencers to drive purchases, social conversation, and unique
content for Etsy by providing affiliate links to any page on
Etsy.com and boosting top posts, has reached over 260,000
participants.
Reverb
- Reverb continues to highlight affordable music gear across its
experience:
- Buyers can now compare prices for used and discounted items to
the typical price for an equivalent brand new item. Reverb's
foundational search ranking model was also optimized to highlight
the best deals on the platform, driving more than 2% increases in
conversion rate in Reverb's native apps.
- Reverb launched its new Reverb Outlet in June, which showcases
high-quality new and like-new gear sold at discounts of 20% or more
from authorized retailers and brands. The launch was promoted
through an integrated marketing campaign spanning earned, owned,
and paid channels.
- Reverb invested in enhanced seller tooling, launching quick
price edits internationally, which drove a 10% lift in price drops,
and rolled out a new platform to help sellers better manage their
listings.
Depop
- Depop removed selling fees for sellers based in the U.S.
effective July 15, and introduced a
small buyer marketplace fee, a change designed to empower sellers
to earn more from their wardrobes, offer improved value and choice
for buyers, and make it easier for people to take their first steps
into secondhand. The evolved fee structure follows similar changes
made in the U.K. market earlier this year.
- Depop also continues to highlight good value on the
marketplace, making it easier and more intuitive for buyers to send
reasonably priced offers to sellers and vice versa.
- Depop focused on positioning itself as a dynamic two-sided
marketplace, with stronger emphasis on seller messaging, while
increasing its in-real-life presence among key target demographics
in the U.S.
Consolidated Q3 24 Financial Guidance
|
Q3 24
Guidance
|
GMS
|
We currently estimate
that Consolidated GMS will
decline in the low single digit range on a year-over-
year basis.
|
Take
Rate
|
Similar to Q2
24
|
Adjusted EBITDA
Margin
|
~27%
|
Regarding our full-year 2024 outlook, we reiterate that
consolidated adjusted EBITDA margin should come in at least the
same as the 2023 result.
Please note that our guidance assumes currency exchange rates
remain unchanged at current levels.
With respect to our expectations under "Consolidated Q3 24
Financial Guidance " and outlook for the remainder of 2024 above,
reconciliation of Adjusted EBITDA margin guidance to the closest
corresponding GAAP measure is not available without unreasonable
efforts on a forward-looking basis due to the high variability,
complexity, and low visibility with respect to the charges excluded
from Adjusted EBITDA; in particular, stock-based compensation
expense, foreign exchange (gain) loss, interest and other
non-operating income, net, provision (benefit) for income taxes,
acquisition, divestiture, and corporate structure-related expenses,
and other non-recurring expenses.
Webcast and Conference Call Information
Etsy will host a video webcast conference call to discuss these
results at 5:00 p.m. Eastern Time
today, which will be live-streamed via our Investor Relations
website (investors.etsy.com) under the Events section. A copy of
the earnings call presentation will also be posted to our
website.
A replay of the video webcast will be available through the same
link following the conference call starting at 8:00 p.m. Eastern Time this evening, for at least
three months thereafter.
About Etsy
Etsy, Inc. operates two-sided online marketplaces that connect
millions of passionate and creative buyers and sellers around the
world. These marketplaces share a mission to "Keep Commerce Human,"
and we're committed to using the power of business and technology
to strengthen communities and empower people. Our primary
marketplace, Etsy.com, is the global destination for unique and
creative goods. Buyers come to Etsy to be inspired and delighted by
items that are crafted and curated by creative entrepreneurs. For
sellers, we offer a range of tools and services that address key
business needs.
Etsy, Inc.'s "House of Brands" portfolio also includes fashion
resale marketplace Depop, and Reverb, the largest online
marketplace dedicated to music gear. Each Etsy, Inc. marketplace
operates independently, while benefiting from shared expertise in
product, marketing, technology, and customer support.
Etsy was founded in 2005 and is headquartered in Brooklyn, New York.
Etsy has used, and intends to continue using, its Investor
Relations website and the Etsy News Blog (blog.etsy.com/news) to
disclose material non-public information and to comply with its
disclosure obligations under Regulation FD. Accordingly, you should
monitor our investor relations website and the Etsy News Blog in
addition to following our press releases, SEC filings, and public
conference calls and webcasts.
Investor Relations Contact:
Deb Wasser, Vice President,
Investor Relations and ESG Engagement
ir@etsy.com
Media Relations Contact:
Sarah Marx, Director, Corporate
Communications
press@etsy.com
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains or references forward-looking
statements within the meaning of the federal securities laws.
Forward-looking statements include statements relating to our
financial guidance for the third quarter of 2024 and outlook for
the full year of 2024 and underlying assumptions; our ability to
reignite Etsy marketplace growth and gain market share; our ability
to invest in strategic growth while delivering on profitability;
our ability to drive buyer engagement through our new Quality
initiatives; and the impact of our "Right to Win" strategy and our
product development and marketing efforts, including the timing and
impact of the launch of Etsy Insider. Forward-looking
statements include all statements that are not historical facts. In
some cases, forward-looking statements can be identified by terms
such as "aim," "anticipate," "believe," "could," "enable,"
"estimate," "expect," "goal," "intend," "may," "outlook," "plan,"
"potential," "target," "will," or similar expressions and
derivative forms and/or the negatives of those words.
Forward-looking statements involve substantial risks and
uncertainties that may cause actual results to differ materially
from those that we expect. These risks and uncertainties include:
(1) the level of demand for our services or products sold in our
marketplaces; (2) the importance to our success of the
trustworthiness of our marketplaces and our ability to attract and
retain active and engaged communities of buyers and sellers; (3)
the fluctuation of our quarterly operating results; (4) our failure
to meet our publicly announced guidance or other expectations; (5)
any real or perceived inaccuracies in our operational metrics; (6)
if we or our third-party providers are unable to protect against
technology vulnerabilities, service interruptions, security
breaches, or other cyber-related events; (7) our dependence on
continued and unimpeded access to third-party services, platforms,
and infrastructure; (8) macroeconomic events that are outside of
our control; (9) operational and compliance risks related to our
payments systems; (10) our ability to recruit and retain employees;
(11) our ability to compete effectively; (12) enforcement of our
marketplace policies; (13) our ability to enhance our current
offerings and develop new offerings to respond to the changing
needs of sellers and buyers; (14) risks related to our
environmental, social, and governance activities and disclosures;
(15) our efforts to expand our operations outside of the United States; (16) acquisitions that may
prove unsuccessful or divert management attention; (17) failure to
deal effectively with fraud; (18) compliance with
evolving regulations, including in the area of privacy and data
protection; and (19) litigation and regulatory matters, including
intellectual property claims. These and other risks and
uncertainties are more fully described in our filings with
the Securities and Exchange Commission, including in the
section entitled "Risk Factors" in our Quarterly Report
on Form 10-Q for the quarter ended March 31,
2024, and subsequent reports that we file with the
Securities and Exchange Commission. Moreover, we operate in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for our management to predict all
risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statements we may make. In light of these
risks, uncertainties, and assumptions, we cannot guarantee future
results, levels of activity, performance, achievements, or events
and circumstances reflected in the forward-looking statements will
occur.
Forward-looking statements represent our beliefs and assumptions
only as of the date of this press release. We disclaim
any obligation to update forward-looking statements.
Etsy,
Inc. Condensed Consolidated Balance Sheets (in
thousands; unaudited)
|
|
|
As of
June 30,
2024
|
|
As of
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
759,211
|
|
$
914,323
|
Short-term
investments
|
240,679
|
|
236,118
|
Accounts receivable,
net
|
10,324
|
|
24,734
|
Prepaid and other
current assets
|
109,311
|
|
129,884
|
Funds receivable and
seller accounts
|
239,481
|
|
265,387
|
Total current
assets
|
1,359,006
|
|
1,570,446
|
Property and equipment,
net
|
238,798
|
|
249,794
|
Goodwill
|
137,742
|
|
138,377
|
Intangible assets,
net
|
435,687
|
|
457,140
|
Deferred tax
assets
|
137,756
|
|
137,776
|
Long-term
investments
|
93,528
|
|
86,676
|
Other assets
|
45,571
|
|
45,191
|
Total
assets
|
$
2,448,088
|
|
$
2,685,400
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
13,070
|
|
$
29,920
|
Accrued
expenses
|
256,819
|
|
353,553
|
Finance lease
obligations—current
|
6,037
|
|
6,079
|
Funds payable and
amounts due to sellers
|
239,481
|
|
265,387
|
Deferred
revenue
|
15,788
|
|
14,635
|
Other current
liabilities
|
33,290
|
|
41,207
|
Total current
liabilities
|
564,485
|
|
710,781
|
Finance lease
obligations—net of current portion
|
96,587
|
|
99,620
|
Deferred tax
liabilities
|
8,788
|
|
13,192
|
Long-term debt,
net
|
2,285,950
|
|
2,283,817
|
Other
liabilities
|
127,274
|
|
121,705
|
Total
liabilities
|
3,083,084
|
|
3,229,115
|
Total stockholders'
deficit
|
(634,996)
|
|
(543,715)
|
Total liabilities and
stockholders' deficit
|
$
2,448,088
|
|
$
2,685,400
|
Etsy,
Inc. Condensed Consolidated Statements of
Operations (in thousands, except per share amounts;
unaudited)
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenue
|
$
647,806
|
|
$
628,876
|
|
$
1,293,760
|
|
$
1,269,753
|
Cost of
revenue
|
184,090
|
|
188,638
|
|
371,223
|
|
384,091
|
Gross profit
|
463,716
|
|
440,238
|
|
922,537
|
|
885,662
|
Operating
expenses:
|
|
|
|
|
|
|
|
Marketing
|
183,063
|
|
165,870
|
|
374,874
|
|
337,184
|
Product
development
|
114,493
|
|
121,988
|
|
224,339
|
|
237,912
|
General and
administrative
|
95,991
|
|
86,661
|
|
185,065
|
|
166,648
|
Asset impairment
charges
|
—
|
|
68,091
|
|
—
|
|
68,091
|
Total operating
expenses
|
393,547
|
|
442,610
|
|
784,278
|
|
809,835
|
Income (loss) from
operations
|
70,169
|
|
(2,372)
|
|
138,259
|
|
75,827
|
Other income,
net
|
8,808
|
|
7,786
|
|
20,373
|
|
10,858
|
Income before income
taxes
|
78,977
|
|
5,414
|
|
158,632
|
|
86,685
|
(Provision) benefit for
income taxes
|
(25,972)
|
|
56,501
|
|
(42,623)
|
|
49,767
|
Net income
|
$
53,005
|
|
$
61,915
|
|
$
116,009
|
|
$
136,452
|
Net income per share
attributable to common stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
0.46
|
|
$
0.50
|
|
$
0.99
|
|
$
1.10
|
Diluted
|
$
0.41
|
|
$
0.45
|
|
$
0.89
|
|
$
0.98
|
Weighted-average common
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
116,432
|
|
123,463
|
|
117,445
|
|
123,971
|
Diluted
|
133,118
|
|
141,011
|
|
134,263
|
|
142,011
|
Etsy,
Inc. Condensed Consolidated Statements of Cash
Flows (in thousands; unaudited)
|
|
|
Six Months
Ended June 30,
|
|
2024
|
|
2023
|
Cash flows from
operating activities
|
|
|
|
Net income
|
$
116,009
|
|
$
136,452
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Stock-based
compensation expense
|
145,400
|
|
145,964
|
Depreciation and
amortization expense
|
53,933
|
|
46,118
|
Provision for expected
credit losses
|
7,321
|
|
10,258
|
Deferred benefit for
income taxes
|
(4,291)
|
|
(67,568)
|
Asset impairment
charges
|
—
|
|
68,091
|
Other non-cash
(income) expense, net
|
(11,556)
|
|
894
|
Changes in operating
assets and liabilities
|
(86,722)
|
|
(148,307)
|
Net cash provided by
operating activities
|
220,094
|
|
191,902
|
Cash flows from
investing activities
|
|
|
|
Purchases of property
and equipment
|
(5,908)
|
|
(3,852)
|
Development of
internal-use software
|
(14,093)
|
|
(12,603)
|
Purchases of
investments
|
(192,863)
|
|
(197,565)
|
Sales and maturities
of investments
|
185,120
|
|
171,307
|
Net cash used in
investing activities
|
(27,744)
|
|
(42,713)
|
Cash flows from
financing activities
|
|
|
|
Payment of tax
obligations on vested equity awards
|
(33,007)
|
|
(49,256)
|
Repurchase of
stock
|
(308,726)
|
|
(187,037)
|
Proceeds from exercise
of stock options
|
2,735
|
|
5,755
|
Payment of debt
issuance costs
|
—
|
|
(2,186)
|
Settlement of
convertible senior notes
|
—
|
|
(90)
|
Payments on finance
lease obligations
|
(3,086)
|
|
(3,150)
|
Other financing,
net
|
3,821
|
|
(278)
|
Net cash used in
financing activities
|
(338,263)
|
|
(236,242)
|
Effect of exchange rate
changes on cash
|
(9,199)
|
|
7,287
|
Net decrease in cash,
cash equivalents, and restricted cash
|
(155,112)
|
|
(79,766)
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
914,323
|
|
926,619
|
Cash, cash equivalents,
and restricted cash at end of period
|
$
759,211
|
|
$
846,853
|
Currency-Neutral GMS Growth
We calculate currency-neutral GMS growth by translating current
period GMS for goods sold that were listed in non-U.S. dollar
currencies into U.S. dollars using prior year foreign currency
exchange rates.
As reported and currency-neutral GMS decline for the periods
presented below are as follows:
|
Quarter-to-Date
Period Ended
|
|
Year-to-Date
Period Ended
|
|
As
Reported
|
|
Currency-
Neutral
|
|
FX
Impact
|
|
As
Reported
|
|
Currency-
Neutral
|
|
FX
Impact
|
June 30,
2024
|
(2.1) %
|
|
(1.9) %
|
|
(0.2) %
|
|
(2.9) %
|
|
(3.0) %
|
|
0.1 %
|
June 30,
2023
|
(0.6) %
|
|
(0.4) %
|
|
(0.2) %
|
|
(2.7) %
|
|
(1.5) %
|
|
(1.2) %
|
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin
In this press release, we provide Adjusted EBITDA, a non-GAAP
financial measure that represents our net income adjusted to
exclude: interest and other non-operating income, net; provision
(benefit) for income taxes; depreciation and amortization;
stock-based compensation expense; foreign exchange (gain) loss;
acquisition, divestiture, and corporate structure-related expenses;
asset impairment charges; restructuring and other exit
(income) costs; and retroactive non-income tax expense. We also
provide Adjusted EBITDA margin, a non-GAAP financial measure that
presents Adjusted EBITDA divided by revenue. Below is a
reconciliation of Adjusted EBITDA to net income, the most directly
comparable GAAP financial measure.
We have included Adjusted EBITDA and Adjusted EBITDA margin
because they are key measures used by our management and Board of
Directors to evaluate our operating performance and trends,
allocate internal resources, prepare and approve our annual budget,
develop short- and long-term operating plans, determine incentive
compensation, and assess the health of our business. As our
Adjusted EBITDA increases, we are able to invest more in our
platforms.
We believe that Adjusted EBITDA and Adjusted EBITDA margin can
provide useful measures for period-to-period comparisons of our
business as they remove the impact of certain non-cash items and
certain variable charges.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of our results as reported under GAAP.
Some of these limitations are:
- Adjusted EBITDA does not reflect interest and other
non-operating income, net;
- Adjusted EBITDA does not reflect tax payments that may
represent a reduction in cash available to us;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements;
- Adjusted EBITDA does not consider the impact of stock-based
compensation expense;
- Adjusted EBITDA does not consider the impact of foreign
exchange (gain) loss;
- Adjusted EBITDA does not reflect acquisition, divestiture, and
corporate structure-related expenses;
- Adjusted EBITDA does not consider the impact of asset
impairment charges;
- Adjusted EBITDA does not reflect restructuring and other exit
(income) costs;
- Adjusted EBITDA does not reflect retroactive non-income tax
expense; and
- other companies, including companies in our industry, may
calculate Adjusted EBITDA differently, which reduces its usefulness
as a comparative measure.
Because of these limitations, you should consider Adjusted
EBITDA and Adjusted EBITDA margin alongside other financial
performance measures, including net income, revenue, and our other
GAAP results.
Reconciliation of
Net Income to Adjusted EBITDA and the Calculation of Adjusted
EBITDA Margin (in thousands, except percentages;
unaudited)
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Net income
|
$
53,005
|
|
$
61,915
|
|
$
116,009
|
|
$
136,452
|
Excluding:
|
|
|
|
|
|
|
|
Interest and other
non-operating income, net
|
(3,947)
|
|
(5,934)
|
|
(9,257)
|
|
(11,623)
|
Provision (benefit)
for income taxes
|
25,972
|
|
(56,501)
|
|
42,623
|
|
(49,767)
|
Depreciation and
amortization
|
27,087
|
|
22,946
|
|
53,933
|
|
46,118
|
Stock-based
compensation expense (1)
|
74,717
|
|
77,281
|
|
145,400
|
|
145,964
|
Foreign exchange
(gain) loss
|
(4,861)
|
|
(1,852)
|
|
(11,116)
|
|
765
|
Acquisition,
divestiture, and corporate structure-related expenses
|
234
|
|
289
|
|
2,132
|
|
578
|
Asset impairment
charges
|
—
|
|
68,091
|
|
—
|
|
68,091
|
Restructuring and
other exit (income) costs
|
(76)
|
|
—
|
|
342
|
|
—
|
Retroactive non-income
tax expense (2)
|
7,244
|
|
—
|
|
7,244
|
|
—
|
Adjusted
EBITDA
|
$
179,375
|
|
$
166,235
|
|
$
347,310
|
|
$
336,578
|
Divided by:
|
|
|
|
|
|
|
|
Revenue
|
$
647,806
|
|
$
628,876
|
|
$
1,293,760
|
|
$
1,269,753
|
Adjusted EBITDA
margin
|
27.7 %
|
|
26.4 %
|
|
26.8 %
|
|
26.5 %
|
|
|
(1)
|
Stock-based
compensation expense included in the Condensed Consolidated
Statements of Operations for the periods presented below is as
follows:
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Cost of
revenue
|
$
8,787
|
|
$
8,171
|
|
$
16,491
|
|
$
15,417
|
Marketing
|
5,882
|
|
6,107
|
|
12,319
|
|
11,369
|
Product
development
|
38,441
|
|
38,220
|
|
72,505
|
|
74,929
|
General and
administrative
|
21,607
|
|
24,783
|
|
44,085
|
|
44,249
|
Stock-based
compensation expense
|
$
74,717
|
|
$
77,281
|
|
$
145,400
|
|
$
145,964
|
|
|
(2)
|
Retroactive non-income
tax expense related to the digital services tax legislation in
Canada, which was enacted on June 28, 2024 retroactive to January
1, 2022.
|
View original
content:https://www.prnewswire.com/news-releases/etsy-inc-reports-second-quarter-2024-results-302211378.html
SOURCE Etsy, Inc.