Etsy Sales Drop 3 Percent in 2nd Quarter of 2024

Etsy marketplace GMS (Gross Merchandise Sales) was down 2.9% in the 2nd quarter, year-over-year, on a currency-neutral basis. Adding in results for its other marketplaces, Etsy said consolidated GMS was down 1.9%.

Etsy CEO Josh Silverman said in Wednesday’s press release announcing the quarterly earnings: “We are pleased that second quarter consolidated results included sequential acceleration of Etsy marketplace year-over-year GMS, higher consolidated revenue both year-over-year and sequentially, and strong adjusted EBITDA profitability. Gifting is proving to be a winning theme – driving growth as a key source of differentiation for Etsy. We are making excellent progress with other bold moves and investments meant to raise consideration among buyers – to help us stand apart more than ever. While this is a challenging environment for our type of goods, we are focused on reigniting Etsy marketplace growth and gaining market share.”

Silverman also announced during the earnings call on Wednesday that Chief Financial Officer Rachel Glaser would be leaving the company, but would remain while the company searches for her replacement.

The following is an excerpt from Etsy’s press release, which can be found on the Investor Relations section of the Etsy website:

Second quarter 2024 performance highlights include:

• Consolidated GMS was $2.9 billion, down 2.1% year-over-year and down 1.9% on a currency-neutral basis. Consolidated GMS included a small headwind from the divestiture of Elo7.
• Etsy marketplace GMS was $2.5 billion, down 3.2% year-over-year and down 2.9% on a currency-neutral basis.
• Gifting GMS1 was up 4.1% year-over-year, representing approximately 27% of GMS, significantly outperforming select online gifting focused peers.2
• Active buyers increased 1.0% year-over-year to 91.5 million, largely flat on a sequential basis, and we continued to see year-over-year growth in international active buyers.
• We reactivated 6.4 million buyers, up 8.5% from the prior year period, and acquired 5.6 million new buyers. Our retention of active buyers remains above pre-pandemic levels on a trailing twelve month basis.
• While GMS per active buyer on a trailing twelve month basis for the Etsy marketplace declined 3.2% year-over-year to $124 in the second quarter, trends in this metric continued to stabilize on a sequential basis.
• Our number of habitual buyers was 6.9 million, down 3.0% year-over-year, although our retention rate of habitual buyers was slightly better on a year-over-year basis.
• U.S. domestic GMS represented 52% of overall GMS and GMS ex-U.S. domestic was 48% of overall GMS.
• Consolidated revenue was $647.8 million, up 3.0% versus the second quarter of 2023, with a take rate (i.e., consolidated revenue divided by consolidated GMS) of 22.0%. Our positive revenue growth was primarily driven by growth in Marketplace revenue, primarily driven by payments revenue and transaction fee revenue from Offsite Ads.
• Consolidated net income was $53.0 million, down $8.9 million year-over-year, reflecting a $7.2 million retroactive non-income tax expense. – Consolidated net income margin (i.e., net income divided by revenue) was approximately 8.2% and diluted net income per share was $0.41.
• Consolidated non-GAAP Adjusted EBITDA was $179.4 million, with consolidated non-GAAP Adjusted EBITDA margin (i.e., consolidated non-GAAP Adjusted EBITDA divided by consolidated revenue) of approximately 27.7%.
• Etsy ended the second quarter with $1.1 billion in cash and cash equivalents and short- and long-term investments. Under Etsy’s stock repurchase program, during the second quarter of 2024 Etsy repurchased an aggregate of approximately $150 million, or 2.4 million shares, of its common stock. These shares were purchased pursuant to a 10b5-1 plan.

On Wednesday, Etsy also announced a new loyalty program for buyers it will test called Etsy Insiders, which will offer paid members free shipping, see more information on the AuctionBytes Blog.