ETSY Q3 2022 Earnings

Call Details

• Call Title: Etsy Q3 2022 Earnings Call
• Date: November 2, 2022 at 9:00 PM UTC
• Management Team:
  • Deb Wasser (VP of Investor Relations and ESG Engagement)
  • Josh Silverman (Chief Executive Officer)
  • Jessica Schmidt (Chief Financial Officer)
  • Jessica Schmidt (Senior Director of Investor Relations)

Call Summary

Financial Performance

• Consolidated Q3 2022 GMS was $3.0B and was down 3% year-over-year on a reported basis.
• Consolidated revenue for Q3 2022 was $594M, up 11.7% year-over-year.
• Consolidated adjusted EBITDA was $168M, representing a 28% adjusted EBITDA margin in Q3 2022.
• Consolidated take rate in Q3 2022 was 19.8%, driven by payments performance and ads growth.
• A non-cash goodwill impairment of about $1B related to Depop and Elo7 resulted in a net loss of $963M and diluted loss per share of $7.62, with the impairment causing an $8.20 diluted EPS impact.
• Operating cash flow in Q3 2022 was $207M, converting 123% of EBITDA to cash, and cash plus short and long-term investments were $1.1B as of September 30, 2022.
• Etsy repurchased $151M of stock in the quarter under the $600M May 2022 share repurchase authorization.

Guidance

• Q4 2022 consolidated GMS is guided to $3.6B to $4.0B, which implies down about 10% at the midpoint versus Q4 2021 and up ~130% versus Q4 2019.
• Etsy marketplace GMS for Q4 2022 is implied to be a roughly high-single-digit year-over-year decline.
• Q4 2022 revenue is guided to $700M to $780M, which is up about 3% at the midpoint versus Q4 2021.
• Q4 2022 adjusted EBITDA margin is expected to be approximately 27% with seasonally higher marketing spend driving the sequential margin decline.
• Guidance assumes currency exchange rates remain unchanged at current levels and the company does not use currency hedges.