Etsy Q1 Earnings Highlights: Revenue Beat, GMS Down, YoY Active Buyers Grow For First Quarter Since 2021 And More

E-commerce operator Etsy Inc ETSY reported first-quarter financial results after the market close Wednesday. Here are the key highlights.

What Happened: Etsy reported first-quarter revenue of $640.88 million, up 10.6% year-over-year. The revenue total beat a Street consensus estimate of $622.82 million, according to data from Benzinga Pro.

Earnings of 53 cents per share missed a Street estimate of 55 cents per share. 

Gross merchandise sales were $3.1 billion for the company in the first quarter, down 4.6% year-over-year. Etsy marketplace GMS was $2.7 billion in the first quarter, down 4.7% year-over-year.

The company said GMS was impacted by a shift from goods to services and several categories like home and living and craft supplies seeing declines. The company also said there was “pressure on consumer discretionary spending particularly for lower household income buyers.”

GMS excluding United States was up 3% year-over-year and represented 46% of the total in the first quarter.

Active buyers on Etsy were up 1% year-over-year to 89.9 million, marking the first growth in this metric since the fourth quarter of 2021 based on year-over-year metrics.

The company said it acquired 7 million new buyers and reactivated 21% more buyers than last year’s period.

Marketplace revenue was up 9.3% year-over-year. Services revenue was up 14.4% year-over-year.

“We are pleased that Etsy has once again delivered solid top and bottom line performance in the first quarter, maintaining the vast majority of our pandemic gains in the face of stiff macroeconomic headwinds,” Etsy CEO Josh Silverman said.

The company ended the first quarter with $1.1 billion in cash and cash equivalents.

Etsy bought back 1.2 million shares in the first quarter worth around $148 million.

Related Link: Trading Strategies For Etsy Stock After Q1 Earnings

What’s Next: Etsy is guiding for second-quarter revenue to come in a range of $590 million to $640 million.

Guidance for GMS for the second quarter is expected to come in a range of $2.85 billion to $3.1 billion.

“We’ve kicked off an exciting pipeline of product development and marketing initiatives to drive improved customers experiences and engagement in 2023,” Silverman said. “We believe that Etsy can be more relevant, more often, to many more millions of buyers around the world.”

Silverman said Etsy will be focused on welcoming new buyers to the platform and being the “preferred platform for our sellers because we help them grow effectively and efficiently.”

Chief Financial Officer Rachel Glaser highlighted the company’s cost structure and margins.

“We believe the our disciplined investment approach can enable above e-commerce industry growth and best-in-class profitability on average and over time.”

ETSY Price Action: Etsy shares are up 2.86% to $101.80 in after-hours trading Wednesday.

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