Etsy (ETSY) Q3 2024 earnings summary

Executive summary

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

• Consolidated GMS declined 4.1% year-over-year to $2.9 billion, with Etsy marketplace GMS down 6% and macro headwinds impacting discretionary spending.

• Depop delivered over 30% GMS growth year-over-year, with U.S. growth outpacing overall; Reverb saw double-digit growth in outlet and exclusive gear.

• Strategic investments focused on customer experience, app engagement, search, loyalty, and gifting, prioritizing foundational changes over short-term GMS gains.

• Board approved a new $1 billion stock repurchase program, with $156 million repurchased in Q3.

Financial highlights

• Q3 2024 consolidated GMS was $2.9 billion, down 4.1% year-over-year; revenue was $662.4 million, up 4.1%; take rate improved to 22.7%.

• Adjusted EBITDA was $183.6 million, margin 27.7%, down 90 bps year-over-year but ahead of guidance.

• Net income for Q3 2024 was $57.4 million, with diluted EPS of $0.45, down from $87.9 million and $0.64 in Q3 2023.

• Free cash flow for Q3 2024 was $204 million, with 90% conversion from adjusted EBITDA.

• 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 is 28–29%.

• Full-year 2024 consolidated GMS anticipated to decline low single digits, with implied adjusted EBITDA margin 27.4–27.7%.

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

• Capital structure and liquidity position are sufficient to meet operating needs for at least the next 12 months.