On July 31, 2024, Etsy Inc (ETSY, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Etsy, a leading e-commerce marketplace operator in the US and UK, connects buyers and sellers of vintage and craft goods. The company reported consolidated gross merchandise volume (GMS) of $13.2 billion in 2023 and continues to be a significant player in the online retail space.
Q2 2024 Financial Performance
Etsy Inc (ETSY, Financial) reported consolidated revenue of $647.8 million for Q2 2024, surpassing the analyst estimate of $629.57 million. However, the company's earnings per share (EPS) came in at $0.41, missing the analyst estimate of $0.44. Despite the mixed results, the company showed resilience in a challenging market environment.
Key Metrics and Achievements
Consolidated GMS for the quarter was $2.9 billion, a 2.1% year-over-year decline. The Etsy marketplace GMS was $2.5 billion, down 3.2% year-over-year. Notably, gifting GMS increased by 4.1% year-over-year, representing approximately 27% of total GMS.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Revenue | $647.8 million | $628.9 million | 3.0% |
| Net Income | $53.0 million | $61.9 million | -14.4% |
| Adjusted EBITDA | $179.4 million | $166.2 million | 7.9% |
| Adjusted EBITDA Margin | 27.7% | 26.4% | 130 bps |
Challenges and Strategic Initiatives
Etsy Inc (ETSY, Financial) faced a challenging environment for its type of goods, but the company is focused on reigniting marketplace growth and gaining market share. CEO Josh Silverman stated,
Gifting is proving to be a winning theme - driving growth as a key source of differentiation for Etsy."The company is investing in strategic growth areas, including gifting, quality initiatives, and a new loyalty program.
Income Statement and Balance Sheet Highlights
Consolidated net income for Q2 2024 was $53.0 million, down from $61.9 million in Q2 2023. The net income margin was 8.2%, and diluted EPS was $0.41. The company ended the quarter with $1.1 billion in cash and cash equivalents and short- and long-term investments. Etsy repurchased approximately $150 million worth of its common stock during the quarter.
Cash Flow and Operational Metrics
Adjusted EBITDA for Q2 2024 was $179.4 million, with an adjusted EBITDA margin of 27.7%. The company reported a 5.9% increase in active sellers to 8.8 million and a 0.4% increase in active buyers to 96.6 million. The retention rate of habitual buyers showed slight improvement year-over-year.
Conclusion and Analysis
Etsy Inc (ETSY, Financial) demonstrated strong revenue growth and maintained profitability despite a challenging market environment. The company's focus on strategic initiatives like gifting and quality improvements is expected to drive future growth. However, the decline in GMS and net income highlights the challenges the company faces in sustaining its growth momentum.
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Explore the complete 8-K earnings release (here) from Etsy Inc for further details.
