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Etsy Grows Sales 21 Percent in Fourth Quarter 2015

Etsy grew Gross Merchandise Sales 21.3% to $741.5 million in the fourth quarter of 2015, the company revealed Tuesday when it released earnings. It said the growth was driven by a 15.5% year-over-year growth in active sellers and 21.4% year-over-year growth in active buyers.

Gross profit for the fourth quarter was $57.7 million, up 36.9% year-over-year, One of the factors helping to drive the gross profit growth was “continued strong growth of Promoted Listings, a higher-margin revenue stream.”

However, the company had a net loss for the fourth quarter of $4.2 million, compared with a $5.4 million net loss in the fourth quarter of 2014. “Etsy’s net loss in the fourth quarter of 2015 was impacted by a foreign exchange loss and our income tax provision,” the company said.

Some additional fourth-quarter factoids of interest to sellers:

  • Total revenue was $87.9 million, up 35.4% year-over-year, driven by growth in both Marketplace and Seller Services revenue.
  • Marketplace revenue grew 19.5%, primarily due to growth in transaction fee revenue and, to a lesser extent, growth in listing fee revenue.
  • Seller Services revenue grew 53.9% year-over-year, due to growth in revenue from both Direct Checkout, which benefited from the integration of PayPal early in the fourth quarter, and Promoted Listings, which grew at a slightly lower rate than Direct Checkout.
  • Seller Services revenue also benefited from growth in revenue from Shipping Labels, which continued to grow faster than Marketplace revenue in the fourth quarter.

Aside from Q4 and full year results, much of what was said during the post-earnings conference call with Wall Street analysts had been covered previously, including during a presentation to investors by Etsy CEO Chad Dickerson last week, covered in EcommerceBytes – including the importance of Seller Services.

On Tuesday, Etsy revealed that 48.1% of active Etsy sellers had used at least one seller service during 2015.

  • 40.2% of active sellers used Direct Checkout;
  • 23.9% of Canadian and US active sellers used Shipping Labels (the two countries where it’s offered);
  • 16.7% of active sellers used Promoted Listings.

Etsy said it plans to continue to refine its advertising services, calling advertising its number-one requested service.

Etsy also revealed its headcount – at the end of the quarter, it employed 819 people, compared to 685 at the end of Q4 2014. And it expects to continue to hire “at a robust pace” in 2016.

In the company’s earnings press release on Tuesday, Dickerson said:

“We are proud of our progress in 2015. We hit many important milestones that are the building blocks for long-term, sustainable growth. We executed against our strategic priorities, particularly in mobile, where we began to narrow the gap between mobile visits and mobile GMS. We also enhanced our existing seller services and continued to bring new constituents into the Etsy Economy. All of this activity allowed Etsy to generate $2.4 billion in GMS in 2015 and support approximately 1.6 million active sellers and more than 24.0 million active buyers. In 2016, we remain committed to reimagining commerce and are focused on launching more products and services that will allow us to build long-term value for our community.”

You can find the full earnings press release on the Etsy website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.