In its most recent earnings report, Etsy's (ETSY 0.49%) revenue numbers weren't as promising as last year. In this video clip from "The Virtual Opportunities Show" on Motley Fool Live, recorded on May 17, Fool.com contributor Jose Najarro examines a few factors that are slowing the growth of the e-commerce company.
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Jose Najarro: I do believe Etsy is one of those top players in the e-commerce world right now. Unfortunately, we can see gross merchandise sales were up only 3.5% year-over-year. That growth story is slowing down a bit right now. Revenue rate also was only up about 5.2%. Again, still growth. You're still seeing impressive growth especially compared to hard comparables of the same time last year. These were companies growing at impressive rates, for example, gross merchandise sales last year grew about 132%.
They are seeing a bit of a decrease in adjusted EBITDA margins. Same time last year was around 33%, now it's about 27%. They do mention that they are investing a lot more money in some of their technologies at the moment. One thing that I did not like is they did see this incremental revenue from the same time last year.
The revenue is coming only from two ways. The first is their acquisitions that they are doing, Depop and ELO7 were two recent acquisitions. That's coming in with a huge portion for that growth in revenue. The second is this new market that they are hitting, Etsy Ads, which I believe is a little bit less than a year old when they really started doing advertising within their platform.
Unfortunately, because of a lot of things happening globally, macroeconomics, they did see a decrease in Etsy Marketplace and they also gave money due to the Ukrainian release. Sorry, let me see what other screens. Regardless, though they are seeing an increase in gross sellers and listings at the moment. More sellers are coming through their systems. Also, those sellers are more likely putting more listings. A lot more products are coming in.
Like I mentioned, adjusted EBITDA margins are seeing a bit of the decrease because of numerous investments that they are doing. Something you don't want to see too much, especially as revenue is slowing down. Again, just like many other companies, we're going to probably hear in the upcoming quarters how they're going to try to find ways to minimize those expenses and probably bring up those margins again in future dates.
Finally, I just want to share a few more slides. Even though they are seeing a bit of growth, their active buyers are actually spending more money on their platform up about 10% year-over-year. They are spending about $137 per quarter, which is impressive compared to just a year ago, was about $124. Those buyers are coming back and those buyers are spending more money.
