Please ensure Javascript is enabled for purposes of website accessibility

Etsy Earnings: Gross Merchandise Sales Volume Accelerates

By Daniel Sparks – Aug 2, 2019 at 8:45AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Marketing investments and improvements to its online marketplace are driving impressive growth in Etsy's active buyers, active sellers, and gross merchandise volume.

Online marketplace Etsy's (ETSY -1.05%) second quarter highlighted more strong growth, driven by robust gains in gross merchandise sales (GMS) volume and in the number of active buyers and sellers on its platform.

"Our excellent second quarter growth in revenue and GMS reflects solid execution across our portfolio of product and marketing investments and the strength of our core marketplace," said Etsy CEO Josh Silverman in the company's second-quarter earnings release.

Here's a look at the results.

Etsy website displayed on a laptop.

Image source: Etsy.

Etsy's second-quarter results: The raw numbers

Metric

Q2 2019

Q2 2018

Change

Revenue

$181 million

$132 million

37%

Net income

$18.2 million

$3.4 million

439%

Earnings per share

$0.14

$0.03

367%

Data source: Etsy second-quarter earnings release.

What happened with Etsy this quarter?

  • Etsy revenue increased 37% year over year, a deceleration from 40% growth in Q1.
  • Net income soared 439% to $18.2 million, translating to EPS of $0.14.
  • Marketplace revenue increased 47.2%.
  • Seller services revenue rose 16.2%.
  • Active buyers increased 19.3%, an acceleration from 18.3% growth in Q1.
  • Active sellers were up 17.7%, also an acceleration from 13% growth in the prior quarter.
  • Total GMS volume rose 21.4%, an acceleration compared to 18.9% growth in Q1.

What management had to say

Perhaps in a nod to Etsy's accelerating growth in active buyers and sellers and its strong gross merchandise sales volume, Silverman said: "We are making great progress improving our product experience and marketing capabilities, and it is paying off."

Other items from Etsy's second quarter that management highlighted in its earnings release include a record high for its pace of product experiments. Further, the company made "significant strides in search and discovery," including a more personalized and dynamic homepage to make it easier for buyers to continue a previous shopping session. The company also said it improved its mobile app by "incorporating signals and nudges throughout the app experience to fuel growth on our highest converting device."

Looking forward

Silverman was optimistic about the company's future, noting that Etsy has "a number of bold new initiatives which we believe will fuel our growth even further, including enhancing the shipping experience, helping our sellers better market and grow their businesses, and our planned acquisition of Reverb."

The company lifted its outlook for full-year GMS volume and revenue growth. Now Etsy expects GMS volume to increase 20% to 22% year over year in 2019, up from a previous forecast for 18% to 21% growth. Management expects revenue in 2019 to rise 32% to 34%, higher than previous guidance for 30% to 32% growth.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Etsy. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Etsy, Inc. Stock Quote
Etsy, Inc.
ETSY
$96.47 (-1.05%) $-1.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.