Etsy (ETSY) Q3 2024 earnings summary

Executive summary

• Revenue grew 4.1% year-over-year to $662.4 million, with a take rate of 22.7% and adjusted EBITDA margin of 27.7%, while net income was $57.4 million, down 34.7% from Q3 2023.

• Consolidated GMS declined 4.1% to $2.9 billion, reflecting macroeconomic headwinds and lower discretionary spending.

• Depop delivered strong GMS growth, especially in the U.S., while Reverb saw double-digit growth in used and exclusive gear.

• Strategic investments focused on customer experience, loyalty, search quality, app engagement, and GenAI-driven features, including the launch of physical gift cards and a new loyalty program.

• Board approved a new $1 billion stock repurchase program, with $156 million repurchased in Q3 and $1.2 billion in cash and investments at quarter end.

Financial highlights

• Consolidated GMS: $2.9 billion, down 4.1% year-over-year; Etsy marketplace GMS down 6%.

• Revenue: $662.4 million, up 4.1% year-over-year, driven by payments, ads, and Depop growth.

• Adjusted EBITDA: $183.6 million (27.7% margin), down 90 bps year-over-year but above guidance.

• Net income: $57.4 million (8.7% margin), down from $87.9 million (13.8%) last year; diluted EPS $0.45.

• Free cash flow: $204 million; cash and investments totaled $1.2 billion as of September 30, 2024.

Outlook and guidance

• Q4 2024 consolidated GMS expected to decline low to mid single digits year-over-year.

• Q4 take rate projected at 22.3%; Adjusted EBITDA margin guidance for Q4: 28%-29%.

• Full-year GMS to be down low single digits, with implied full-year Adjusted EBITDA margin 27.4-27.7%.

• Management expects continued macroeconomic uncertainty and pressure on discretionary spending.