ETSY Q3 2021 Earnings

Call Details

• Call Title: Etsy, Inc. Q3 2021 Earnings Call
• Date: November 4, 2021
• Management Team:
  • Deb Wasser (VP of Investor Relations and ESG Engagement)
  • Josh Silverman (Chief Executive Officer)
  • Rachel Glaser (Chief Financial Officer)
  • Gabe Radcliffe (Director of Investor Relations)

Call Summary

Financial Performance

• Consolidated GMS was $3.1B, described by the CEO as up 17% on a year-over-year currency-neutral basis and by the CFO as up 18% year-over-year.
• Consolidated revenue was $532M, up 18% year-over-year.
• Adjusted EBITDA was $174M with a margin of about 33% on a consolidated basis.
• Excluding the acquisitions of Depop and Elo7 but inclusive of Reverb, take rate was 17.5% and adjusted EBITDA margin was approximately 36%.
• Reverb, Depop, and Elo7 collectively represented approximately 12% of Q3 consolidated GMS following July closings.
• Approximately 83% of consolidated GMS was derived organically in Q3.
• Active buyers were 89M, which was up 30% year-over-year, repeat buyers were 36M, up 35% year-over-year, and habitual buyers were nearly 8M, up 65% year-over-year.
• Cash, cash equivalents and short/long-term investments totaled approximately $907M as of 9/30 and the company had a $200M revolver undrawn.

Guidance

• Q4 consolidated GMS is guided to $3.9B to $4.1B, which implies about 12% growth at the midpoint versus Q4 last year.
• Q4 revenue is guided to $660M to $690M, which implies about 10% growth at the midpoint versus Q4 last year.
• Q4 adjusted EBITDA margin is expected to be about 26%.
• The Etsy marketplace is forecast to deliver high single-digit GMS growth in Q4, implying relatively stable two-year growth versus Q3.
• Face masks represented 4% or $133M of Etsy marketplace GMS in Q4 2020 and are expected to be relatively inconsequential in Q4 2021.
• DPOP and Elo7 are expected to be accretive to top line but dilutive to adjusted EBITDA margin because of lower take rates and increased amortization from purchase price allocation.
• The company expects to step up marketing spend in Q4 and to continue elevated hiring into the quarter.