Etsy, Inc.
CEO : Mr. Joshua G. Silverman
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q2 | 7.5% YoY | -103.3% | -13.8% | 2023-08-02 |
Josh Silverman says,
Key Points from Etsy Q2 2023 Earnings Call
- Etsy’s consolidated Gross Merchandise Sales (GMS) was $3 billion, flat compared to last year.
- Revenue grew 7.5% to $629 million.
- Adjusted EBITDA margin was strong at 26.4%.
- Growth: GMS for the Etsy marketplace was about $2.6 billion, also flat compared to the prior year.
- Quarterly active buyers reached an all-time high of 91 million.
- Growth: GMS grew year-over-year in May, June, and July.
- Positive trends in important categories and early signs of stabilization in GMS per buyer and habitual buyer metrics.
- Focus on welcoming new buyers, elevating the best of Etsy, instilling trust in transactions, and being the platform sellers love to sell on.
- Improving relevance of search results and identifying high-quality listings to attract higher value and repeat buyers.
- Investments in organizing and curating the marketplace to improve the buyer experience.
- Launch of curated Shop the Look in home and living and Etsy wedding registry, with plans to expand to more categories.
- Initiatives to highlight specific Etsy seller merchandise and offer deals to buyers.
- Focusing on trust and safety, reducing issue resolution time for cases and increasing purchase protection messaging.
- Investing in seller growth suite to provide personalized insights and tools for sellers to grow their business.
- Efforts to democratize ML to streamline and automate the deployment of ML models.
- Marketing initiatives with collaborations, design awards, and campaigns to drive awareness and engagement.
- Focus on increasing GMS per buyer and bringing buyers back to the platform faster for repeat purchases.
- Selling Brazil-based marketplace Elo7 to Enjoei to sustain the marketplace and its sellers.
Joshua Silverman says,
Etsy’s Generous Payment Policy
- Etsy has a payment policy where 100% of the buyer’s payment is transferred to the seller immediately after a purchase.
- This policy is based on faith that sellers will fulfill their orders, but sometimes issues arise.
- Etsy steps in to fill the gap when problems occur to ensure buyer satisfaction and protect the marketplace’s reputation.
Introduction of Payment Reserve
- In 2021, Etsy introduced a payment reserve program for sellers perceived to be high risk.
- Through this program, a small number of sellers have a portion of their payment withheld.
- The reserve program is continuously improved to be more precise, withhold the minimum amount necessary, and provide better communication to sellers about their status.
Improvements and Reduction in Reserves
- Etsy recently announced improvements in clarifying the reasons for sellers being in the reserve program.
- The company also stated that they will be reducing the amount held from the majority of sellers.
- The goal is to only place sellers in reserve when necessary and minimize the impact on their finances.
Current Status of Payment Reserve Program
- Currently, only a low single-digit percentage of sellers are in the reserve program.
- 70% of these sellers have less than $50 held in payment reserves.
- Etsy aims to communicate with sellers effectively and release them from the reserve program as soon as possible.
Commitment to Marketplace Safety
- Etsy continually listens, learns, and works together with sellers and buyers to ensure the safety and trustworthiness of the marketplace.
- The company strives to provide a seamless experience for buyers and sellers while maintaining their brand reputation.
Q & A sessions,
Sustainable Pricing
- Etsy has started focusing on helping sellers set better pricing
- They are developing tools to provide sellers with the right data to set the right price for their listings
- Etsy aims to give sellers context and insights to make better pricing decisions
Promotions and Insights
- Etsy is researching when and how to use promotions effectively
- They are gathering insights on the impact of different promotion strategies
- Etsy wants to provide sellers with more information on when to use promotions and how much to offer
- Etsy believes that sharing these insights can help sellers make better-informed decisions
Gen AI and Customer Impact
- Etsy is exploring the potential benefits of Gen AI for software developers and improving productivity
- They are testing tools like CoPilot to make Etsy more efficient and nimble
- Etsy wants to help sellers by auto-generating responses and listings
- Etsy believes that making the search experience more conversational can provide context and help buyers navigate the vast number of listings
GMS per Buyer
- Etsy saw GMS per active buyer in the U.S. grow by over 30% during the pandemic
- Despite increased competition and other challenges, GMS per active buyer in the U.S. has remained consistent
- International growth has been stronger, resulting in a slight decline in GMS per active buyer in international markets
- Etsy sees the opportunity for further growth in both domestic and international markets
Growth Opportunities
- Etsy believes there is still significant potential to increase the number of active buyers domestically and internationally
- They are expanding advertising efforts in international markets with positive ROI
- Etsy aims to improve conversion rates, enhance the quality of search results, and assist sellers in setting the right prices
- Curation and promoting sellers’ promotions are strategies to drive conversion rates and enhance the overall customer experience
No bad stock 