Etsy grew sales (GMS) 22.6% to $669.7 million in the second quarter – meaning sellers saw sales growth and new sellers came on board. But the company did better than sellers – it grew its revenue by nearly 40%. Nevertheless, it reported a net loss of $7.3 million for Q2.
Growth in GMS was supported by 11.5% year-over-year growth in active sellers (to 1.7 million sellers) and 20.3% year-over-year growth in active buyers (to 26.1 million buyers).
Total revenue was $85.3 million, up 39.1% year-over-year:
- Marketplace revenue grew 22.8%, primarily due to growth in transaction fee revenue and, to a lesser extent, growth in listing fee revenue.
- Seller Services revenue grew 58.1% year-over-year and was driven primarily by revenue growth in Direct Checkout, which continued to benefit from the integration of PayPal.
Etsy said Seller Services revenue also benefited from revenue growth from Promoted Listings and Shipping Labels, and to a lesser extent, a modest contribution from Pattern by Etsy, its store-hosting service that launched in April.
In a conference call with Wall Street analysts on Tuesday, Etsy executives revealed plans to run its strongest marketing campaign to date.
Etsy CEO Chad Dickerson said in recent months, the company has taken a look at the Etsy brand definition and positioning and exploring ways to raise awareness of Etsy as a go-to shopping destination: “We want to show there’s something for everyone, every day, on Etsy,” he said.
“We plan to bring this point of view to life in our 2016 holiday campaign, which we believe will be our strongest yet,” Dickerson said. Etsy will share more on this in the coming months.
Etsy discussed the impact of the company’s new Brooklyn headquarters, and it hired new employees during the quarter, bringing headcount from 852 to 921. That’s 8% growth from Q1, and Etsy CFO Kristina Salen said to expect the pace of hiring to continue (though most of the second-half growth would occur in the third quarter).
Like his rival eBay CEO Devin Wenig, Dickerson called his marketplace a technology company. He explained how Etsy was able to bring listings to more buyers thanks to its use of machine translation, enabling buyers and sellers to view listings in other languages, communicate with each other, and consummate sales. Interestingly, the majority of listings are listed in US dollars, he mentioned.
Dickerson also addressed the technical disaster its sellers experienced with Direct Checkout payment processing, which he blamed on third-party vendor Worldpay. He said Etsy is working to make the platform even stronger, adding redundancy and resiliency. “We’re 100 percent committed to making sure that checkout on Etsy remains reliable, convenient, and secure.”
Dickerson also said Etsy is adding new constituents through its Wholesale and its Manufacturing program.
The CFO’s portion of the presentation was for the most part inaudible through the webcast.
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