ETSY Q2 2023 Earnings

Call Details

• Call Title: Etsy, Inc. Q2 2023 Earnings Call
• Date: August 2, 2023 at 9:00 PM UTC
• Management Team:
  • Deb Wasser (VP of Investor Relations)
  • Josh Silverman (Chief Executive Officer)
  • Rachel Glaser (Chief Financial Officer)
  • Jessica Schmidt (Senior Director of Investor Relations)

Call Summary

Financial Performance

• Consolidated GMS was $3 billion, roughly flat year over year for the quarter.
• Consolidated revenue grew 7.5% year over year to $629 million.
• Adjusted EBITDA was $166 million, representing a 26.4% adjusted EBITDA margin for the quarter.
• Etsy Marketplace standalone GMS was $2.6 billion, down 0.7% year over year.
• Consolidated take rate was 20.9%, modestly ahead of the midpoint implied by quarterly guidance.
• Consolidated product development spend increased 19% year over year to $122 million in the quarter.
• Consolidated marketing spend increased 1% year over year to $166 million, with marketing as a percentage of revenue decreasing 160 basis points to 26%.
• Free cash flow for the quarter was $128 million and cash, cash equivalents, and investments totaled $1.2 billion as of June 30.

Guidance

• Third quarter 2023 consolidated GMS is forecast to be approximately $2.95 billion to $3.1 billion, with a midpoint of about $3.03 billion that the company describes as slightly up year over year.
• Third quarter 2023 revenue is guided to $610 million to $645 million, with the midpoint described as up nearly 6% year over year.
• Third quarter adjusted EBITDA margin is guided to 27% to 28% for another strong margin quarter.
• The guidance includes ELO7 only for half of the quarter due to an expected divestiture closing shortly.
• The company expects the implied take rate to be down slightly sequentially in Q3 and cautions that Q4 take rate can see seasonal pressure.
• Guidance implicitly assumes macro conditions remain roughly similar to current levels at the midpoint, with the high end reflecting improvement and the low end reflecting modest worsening.