Etsy Q3 Earnings: EPS Beat, Revenue Up 7% Amid 'Challenging Environment' For Discretionary Spending

Etsy Inc ETSY reported third-quarter financial results on Wednesday. Here's a look at the key highlights from the quarter.

Q3 Earnings: Etsy said third-quarter revenue increased 7% year-over-year to $636.3 million, which missed the consensus estimate of $640.566 million, according to Benzinga Pro. The company reported quarterly earnings of 64 cents per share, which beat estimates of 51 cents per share.

Consolidated GMS (gross merchandise sales) totaled $3 billion in the quarter, up 1.2% year-over-year. 

The company said headwinds to consolidated GMS included the dynamic macroeconomic environment, which impacted consumer discretionary product spending, as well as a small headwind from the mid-quarter divestiture of Elo7. Etsy marketplace GMS was up 1% year-over-year to $2.7 billion.

Etsy ended the quarter with $1.1 billion in cash, equivalents and short- and long-term investments. 

"Etsy's consolidated results were in line with expectations for modest top line growth and very strong profitability. While we are undoubtedly operating in a challenging environment for spending on consumer discretionary items, we believe that we are at least holding our share gains in our top categories," said Josh Silverman, CEO of Etsy.

Outlook: Etsy expects fourth-quarter GMS to decline in the low-single-digit range year-over-year. 

"However, if trends worsen, that could become a mid-single-digit decline, and if trends improve, GMS could be flat or even up slightly year-over-year," the company said. 

The fourth-quarter take rate is expected to be approximately 20.8%. Adjusted EBITDA margin for the fourth quarter is currently estimated to be between 26% and 27%. 

Management will hold a conference call to discuss these results at 5 p.m. ET.

From Last Week: Etsy's Q3 Traffic Trends Raise Concerns, To See Macro And Competitive Pressures Drive Downside Risk, Says Analyst

ETSY Price Action: Etsy shares were down 3.80% after hours at $58.49 at the time of writing, according to Benzinga Pro.

Photo: Ellie Whitehead from Pixabay.