ETSY INC

Previous wording

Etsy operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world. These marketplaces - which collectively create a “House of Brands” - share our mission, common levers for growth, similar business models, and a strong commitment to use business and technology to strengthen communities and empower people.

Current wording

Etsy operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world. These marketplaces share our mission, common levers for growth, similar business models, and a strong commitment to use business and technology to strengthen communities and empower people.

Previous wording

Our primary marketplace, Etsy.com, is the global destination for unique and creative goods made by independent sellers. The Etsy marketplace connects creative artisans and entrepreneurs with thoughtful consumers looking for items that are a joyful expression of their taste and values. By surfacing quality listings at a great value and providing a reliable shopping experience to buyers, we aim to create a virtuous cycle that not only benefits Etsy, but creates economic opportunities for the millions of sellers in our marketplace. Our success is aligned with our sellers; we make money when they do. In addition to bringing them an audience of tens of millions of buyers, we offer a range of features and services designed to help them generate more sales and run their businesses. Similarly, we also make money when we meet our buyers’ expectations. When they find quality listings, at great value, and have a reliable and dependable experience from discovery to delivery, it fuels a virtuous cycle, benefiting our global community of sellers and buyers, as well as Etsy and our broader stakeholders.

Current wording

Our primary Etsy marketplace is the global destination for unique, creative goods from independent sellers. It connects artisans and entrepreneurs with thoughtful consumers seeking items that reflect their tastes and values. We aim to create a virtuous cycle that benefits all of our stakeholders. Ultimately, our success is tied to our sellers; we make money when they do. In addition to providing them with access to tens of millions of buyers, we offer tools and services to help sellers grow. For buyers, we surface quality listings that offer great value and provide a reliable shopping experience. When buyers are satisfied, it fuels this cycle.

Previous wording

•Growing the Etsy marketplace in our six core geographies; and

Current wording

•Growing the Etsy marketplace in our core geographies and globally; and

Previous wording

Our investments in technology infrastructure, product development, marketing, trust and safety, member support, and helping sellers grow support our strategy, which you can read more about in our Annual Report.

Current wording

Our investments in technology infrastructure, product development, marketing, trust and safety, member support, helping sellers grow, and fostering engaged and impactful teams, support our strategy, which you can read more about in our Annual Report.

Previous wording

Third Quarter 2024 Key Metrics and Financial Highlights

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First Quarter 2025 Key Metrics and Financial Highlights

Previous wording

As of September 30, 2024, our marketplaces connected 8.5 million active sellers and 96.7 million active buyers in nearly every country in the world. In the three and nine months ended September 30, 2024, sellers generated GMS of $2.9 billion and $8.9 billion, respectively. We are a global company and approximately 46% and 45%, respectively, of our GMS in the three and nine months ended September 30, 2024 came from transactions where either a seller or a buyer, or both, were located outside of the United States.

Current wording

As of March 31, 2025, our marketplaces connected 8.1 million active sellers and 94.8 million active buyers in nearly every country in the world. In the three months ended March 31, 2025, sellers generated GMS of $2.8 billion.

Previous wording

Total revenue was $662.4 million and $2.0 billion in the three and nine months ended September 30, 2024, respectively. In the three and nine months ended September 30, 2024, we recorded net income of $57.4 million and $173.4 million, respectively, and non-GAAP Adjusted EBITDA of $183.6 million and $530.9 million, respectively. See “Non-GAAP Financial Measures” for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated in accordance with GAAP.

Current wording

Total revenue was $651.2 million in the three months ended March 31, 2025. In the three months ended March 31, 2025, we recorded net loss of $52.1 million, and non-GAAP Adjusted EBITDA of $171.1 million. See “Non-GAAP Financial Measures” for more information and for a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable financial measure calculated in accordance with GAAP. As of March 31, 2025, it was determined that a sale of the Reverb reporting unit was more likely than not. As such, a quantitative assessment was performed, resulting in a non-cash goodwill impairment charge of $101.7 million in the three months ended March 31, 2025. See Part I, Item 1, “Note 5—Goodwill” for further information.

Previous wording

Cash and cash equivalents and short-term investments were $1.0 billion as of September 30, 2024. As of September 30, 2024, we had three outstanding series of convertible notes, which collectively had a net carrying value of $2.3 billion. Additionally, we have the ability to draw down on our $400.0 million senior secured revolving credit facility. In the nine months ended September 30, 2024, we had positive operating cash flows of $437.5 million.

Current wording

Cash and cash equivalents and short-term investments were $867.7 million as of March 31, 2025. As of March 31, 2025, we had three outstanding series of convertible notes, which collectively had a net carrying value of $2.3 billion. Additionally, we have the ability to draw down on our $400.0 million senior secured revolving credit facility. In the three months ended March 31, 2025, we had positive operating cash flows of $49.2 million.

Previous wording

We collect and analyze operating and financial data to evaluate the health and performance of our business and allocate our resources (such as capital, people, and technology investments). We are providing Etsy marketplace standalone information in certain instances where particularly relevant. The financial results of Elo7 have been included in our condensed consolidated financial results (“Consolidated”) until August 10, 2023 (date of sale). The unaudited GAAP and non-GAAP financial measures and key operating metrics we use are:

Current wording

We collect and analyze operating and financial data to evaluate the health and performance of our business and allocate our resources (such as capital, people, and technology investments). We are providing Etsy marketplace standalone information in certain instances where particularly relevant. The financial measures and key operating metrics we use are:

Previous wording

(1)Consolidated GMS for the three and nine months ended September 30, 2024 includes Etsy marketplace GMS of $2.5 billion and $7.6 billion, respectively. Percent GMS ex-U.S. domestic for the Etsy marketplace for the three and nine months ended September 30, 2024 was 49% and 48%, respectively.

Current wording

(1)Consolidated GMS for the three months ended March 31, 2025 includes Etsy marketplace GMS of $2.3 billion.

Previous wording

(2)Consolidated active sellers and active buyers includes Etsy marketplace active sellers and active buyers of 6.2 million and 91.2 million, respectively, as of September 30, 2024. Consolidated active sellers and active buyers as of September 30, 2023 includes Elo7 marketplace active sellers and buyers of approximately 52 thousand and 1.5 million as Elo7 was included in our consolidated financial results until August 10, 2023 (the date of sale).

Current wording

(3)Consolidated active sellers and active buyers includes Etsy marketplace active sellers and active buyers of 5.4 million and 88.5 million, respectively, as of March 31, 2025.

Previous wording

Gross merchandise sales (“GMS”) is the dollar value of items sold in our marketplaces, excluding shipping fees and net of refunds, within the applicable period. GMS does not represent revenue earned by us. GMS is largely driven by transactions in our marketplaces and is not directly impacted by Services activity. However, because our revenue and cost of revenue depend significantly on the dollar value of items sold in our marketplace, we believe that GMS is an indicator of the success of our sellers, the satisfaction of our buyers, and the health, scale, and growth of our business. We track “Paid GMS” for the Etsy marketplace and define it as Etsy marketplace GMS that is attributable to our performance marketing efforts, which excludes most of our marketing investments focused on brand awareness like TV and digital video.

Current wording

Gross merchandise sales (“GMS”) is the dollar value of items sold in our marketplaces, excluding shipping fees and net of refunds, within the applicable period. GMS does not represent revenue earned by us. GMS is largely driven by transactions in our marketplaces and is not directly impacted by Services activity. However, because our revenue and cost of revenue depend significantly on the dollar value of items sold in our marketplace, we believe that GMS is an indicator of the success of our sellers, the satisfaction of our buyers, and the health and scale of our business. We track “Paid GMS” for the Etsy marketplace and define it as Etsy marketplace GMS that is attributable to our performance marketing efforts, which excludes most of our marketing investments focused on brand awareness like TV and digital video.

Previous wording

GMS decreased $124.7 million to $2.9 billion in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, and GMS decreased $302.8 million to $8.9 billion in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in GMS between both the three and nine months ended September 30, 2024 and 2023 was primarily driven by a decrease in Etsy marketplace GMS, partially offset by an increase in GMS for the Depop marketplace. Etsy marketplace GMS reflected a still dynamic macroeconomic environment that impacted consumer discretionary product spending, particularly in our top three geographies, the U.S., U.K., and Germany. We also believe that a number of discrete events created headwinds for our business during the quarter, including weather, domestic and global geopolitical uncertainties, and various cultural events. The Etsy marketplace GMS per active buyer on a trailing twelve month basis declined 3.4% year-over-year to $123, along with a year-over-year decline of 0.4% for active buyers on the Etsy marketplace to 91.2 million.

Current wording

GMS decreased $193.2 million to $2.8 billion in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease in GMS between the three months ended March 31, 2025 and 2024 was primarily driven by a decrease in Etsy marketplace GMS, partially offset by an increase in GMS for the Depop marketplace. Etsy marketplace GMS reflected the continued impact of pressure on consumer discretionary product spending, a highly promotional and competitive retail environment, and category mix. In addition, GMS at the start of 2025 is being impacted by changes to Etsy’s product development strategy last year which prioritized foundational investments over near-term GMS driving initiatives. The Etsy marketplace GMS per active buyer on a trailing twelve-month basis declined 3.5% year-over-year to $120, along with a year-over-year decline of 3.4% of active buyers on the Etsy marketplace to 88.5 million.

Previous wording

Adjusted EBITDA represents our net income adjusted to exclude: interest and other non-operating income, net; provision (benefit) for income taxes; depreciation and amortization; stock-based compensation expense; foreign exchange loss (gain); acquisition, divestiture, and corporate structure-related expenses; asset impairment charges; loss on sale of business; restructuring and other exit costs; and retroactive non-income tax expense. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue. See “Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure.

Current wording

Adjusted EBITDA represents our net (loss) income adjusted to exclude: stock-based compensation expense and related payroll taxes; depreciation and amortization; provision for income taxes; interest and other non-operating income, net; foreign exchange loss (gain); asset impairment charge; acquisition, divestiture, and corporate structure-related expenses; and restructuring and other exit (income) costs. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue. See “Non-GAAP Financial Measures” for a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP financial measure.

Previous wording

We calculate currency-neutral GMS growth by translating current period GMS for goods sold that were listed in non-U.S. dollar currencies into U.S. dollars using prior year foreign currency exchange rates.

Current wording

We calculate currency-neutral GMS by translating current period GMS for goods sold that were listed in non-U.S. dollar currencies into U.S. dollars using prior year foreign currency exchange rates.

Previous wording

Marketplace revenue increased due to a mix of volume and pricing, primarily driven by payments expansion as well as higher payments revenue in locations in which we charge a higher payments fee for both the Etsy and Depop marketplaces. As part of the payments expansion, the share of Etsy marketplace GMS processed through our Etsy Payments platform increased to 99% for the three months ended September 30, 2024 compared to 93% for the three months ended September 30, 2023 resulting in an increase in payments revenue of 8.3% in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Additionally, marketplace revenue increased due to pricing, driven by the launch of a seller set-up fee for the Etsy marketplace in 2024, under which a seller pays a set-up fee when they open a shop. There was also an increase in transaction fee revenue from offsite advertising that generates a higher transaction fee and an increase in GMS for the Depop marketplace, partially offset by a decline in GMS for the Etsy marketplace, resulting in relatively flat transaction fee revenue year-over-year, driven by a mix of volume and pricing.

Current wording

Marketplace revenue decreased primarily due to a decrease in transaction fee revenue, including offsite advertising, of 6.3%, due to a mix of volume and pricing, primarily driven by a decline in GMS for the Etsy marketplace, and partially offset by an increase in GMS for the Depop marketplace, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was partially offset by an increase in marketplace revenue due to pricing, driven by the launch of a seller set-up fee for the Etsy marketplace in April 2024, under which a seller pays a set-up fee when they open a shop. Additionally, marketplace revenue increased due to a mix of volume and pricing, related to a 2.1% increase in payment revenue, primarily driven by Depop payments expansion as well as higher payments revenue in locations in which we charge a higher payments fee for the Depop marketplace.

Previous wording

The growth in Services revenue was primarily driven by an increase of 5.4% in on-site advertising revenue, primarily due to an increase in average price per click on Etsy Ads. Service revenue also increased, to a lesser extent, due to an increase of 20.5% in shipping label revenue, primarily due to the Depop marketplace.

Current wording

The growth in Services revenue was primarily driven by an increase of 6.2% in on-site advertising revenue, primarily due to an increase in average price per click on Etsy Ads, and, to a lesser extent, an increase from the Depop marketplace.

Previous wording

Marketing expenses increased, primarily driven by increased digital marketing costs, as we continued to invest in efficient channels and regions with positive return on investment. Additionally, marketing expenses increased to a lesser extent due to non-digital marketing costs, primarily driven by Depop U.S. brand marketing campaigns and an increase in Etsy marketplace broadcasting costs across different media channels primarily in North America, including a prime time big game television advertisement. These increases were partially offset by a decrease in employee compensation-related expenses, related to our workforce reductions in the fourth quarter of 2023. Paid GMS was 21% of overall GMS for the nine months ended September 30, 2024 compared to 20% for the nine months ended September 30, 2023.

Current wording

Marketing expenses decreased, primarily driven by a decrease in stock-based compensation primarily due to forfeitures related to an executive departure. Direct marketing costs increased slightly in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This was driven by an increased focus on performance marketing, as we continued to increase investments in efficient channels and regions with positive return on investment. The increase in performance marketing was largely offset by a decrease in spend on brand marketing as a result of a decrease in broadcasting costs across different media channels primarily in North America, including no prime time big game television advertisement as compared to the first quarter of 2024. Paid GMS was 23% of overall GMS for the three months ended March 31, 2025 compared to 20% for the three months ended March 31, 2024. We gained leverage as marketing did not increase as fast as revenue.

Previous wording

Asset impairment charges were $68.1 million in the nine months ended September 30, 2023, related to the impairment of intangible assets and property and equipment of Elo7. See Part I, Item 1, “Note 5—Asset Impairment Charges” for more information. There were no asset impairment charges in the nine months ended September 30, 2024.

Current wording

Asset impairment charge was $101.7 million in the three months ended March 31, 2025, related to the impairment of the goodwill of Reverb. See Part I, Item 1, “Note 5—Goodwill” for more information. There was no asset impairment charge in the three months ended March 31, 2024.

Previous wording

The primary drivers of our income tax provision for the nine months ended September 30, 2024 were tax expense on income before income taxes, tax deficiencies from stock-based compensation due to a lower stock price at vesting of restricted stock units compared to the stock price upon grant, and state and local income taxes.

Current wording

The primary drivers of our income tax provision for the three months ended March 31, 2025 were tax expense on income before income taxes excluding the impairment charge and tax deficiencies from stock-based compensation due to a lower stock price at vesting of restricted stock units compared to the stock price upon grant.

Previous wording

The following table reflects the reconciliation of net income to Adjusted EBITDA and the calculation of Adjusted EBITDA margin for each of the periods indicated:

Current wording

The following table reflects the reconciliation of net (loss) income to Adjusted EBITDA and the calculation of Adjusted EBITDA margin for each of the periods indicated:

Previous wording

Cash and cash equivalents and short-term investments were $1.0 billion as of September 30, 2024. Additionally, we have $107.0 million in long-term investments, a majority of which we can liquidate at short notice and with minimal penalties if needed. We also have the ability to draw down on our $400.0 million senior secured revolving credit facility. As of September 30, 2024, we had net working capital of $767.7 million and in the nine months ended September 30, 2024, we had positive operating cash flows of $437.5 million. We believe that this capital structure, as well as the nature and framework of our business, will allow us to meet all debt covenants, sustain our business operations, and be able to react to changing macroeconomic conditions.

Current wording

Cash and cash equivalents and short-term investments were $867.7 million as of March 31, 2025. Additionally, we have $129.5 million in long-term investments, a majority of which we can liquidate at short notice and with minimal penalties if needed. We also have the ability to draw down on our $400.0 million senior secured revolving credit facility. As of March 31, 2025, we had net working capital of $590.8 million and in the three months ended March 31, 2025, we had positive operating cash flows of $49.2 million. We believe that this capital structure, as well as the nature and framework of our business, will allow us to meet all debt covenants, sustain our business operations, and be able to react to changing macroeconomic conditions.

Previous wording

See Part I, Item 1, “Note 1—Basis of Presentation and Summary of Significant Accounting Policies” for information regarding recently issued accounting pronouncements.

Current wording

See Part I, Item 1, “Note 1—Basis of Presentation and Summary of Significant Accounting Policies” for information regarding recently adopted and recently issued accounting pronouncements.