Etsy, Inc. Reviews Fourth Quarter and Full Yr 2021 Outcomes

BROOKLYN, N.Y., Feb. 24, 2022 /PRNewswire/ — Etsy, Inc. (NASDAQ: ETSY), which operates two-sided on-line marketplaces that join tens of millions of passionate and artistic consumers and sellers around the globe, at this time introduced monetary outcomes for its fourth quarter and full 12 months ended December 31, 2021.

“Even in a world of tremendously expanded selection, Etsy remained high of thoughts for shoppers, resulting in our supply of document ranges of GMS, income, and adjusted EBITDA within the fourth quarter,” stated Josh Silverman, Etsy, Inc. Chief Government Officer. “In the course of the vacation season, our sellers — most companies of 1 and insulated from widespread provide shortages or advanced achievement processes — introduced the advantages of procuring small to scale. Consumers proceed to like their experiences with Etsy and are coming again for extra.”

Fourth quarter 2021 efficiency highlights embrace:

• Consolidated GMS was a document $4.2 billion, up 16.5% year-over-year; Etsy market GMS was additionally a document $3.8 billion, up 11.8% year-over-year and 154% on a two-year foundation.
• Our document fourth quarter GMS efficiency was pushed by an early and robust kick off to the vacation season in October and prolonged power by means of December.
• A number of thrilling vacation information have been set, together with 8% year-over-year development in GMS per purchaser on Black Friday, a document 2,000 orders per minute on Cyber Monday, and practically a half million vendor outlets collaborating in our Cyber gross sales, up 27% from final 12 months.
• Etsy market’s GMS per energetic purchaser on a trailing twelve month foundation was $136, rising 16% year-over-year. On a two-year foundation, this metric is up 31%.
• The Etsy market acquired roughly 10 million new consumers within the fourth quarter, our highest degree of recent purchaser acquisition for the reason that fourth quarter of 2020. We reactivated 6.8 million consumers who had not bought in a 12 months or extra.
• Ordinary consumers, these with 6 or extra buy days and over $200 in spend within the trailing twelve months, grew 26% year-over-year, remaining our quickest rising cohort. On a two-year foundation routine consumers grew 224%.
• Non-U.S. GMS for the Etsy market was 44% of general GMS, and elevated 20% year-over-year on a currency-neutral foundation.
• GMS from paid channels was 19% of general GMS, lowering 200 foundation factors in comparison with the fourth quarter of 2020 as the proportion of visitors from non-paid channels elevated.
• Consolidated income was a document $717.1 million, up 16.2% year-over-year, with a take price (i.e., Consolidated income divided by Consolidated GMS) of 17.1%.
• Web earnings was $161.6 million, up 8.8% year-over-year, with diluted earnings per share of $1.11.
• Non-GAAP Adjusted EBITDA was a record $218.8 million, with Non-GAAP Adjusted EBITDA margin (i.e., Non-GAAP Adjusted EBITDA divided by Consolidated income) of 31%, flat year-over-year.
• We ended the 12 months with $1.1 billion in money and money equivalents, short- and long-term investments. Below Etsy’s inventory repurchase program, throughout the quarter Etsy repurchased an combination of roughly $68 million, or 287,368 shares, of its widespread inventory.

Mr. Silverman added, “Reflecting on 2021, it’s truthful to say that Etsy has retained a lot of the constructive influence we have seen from the dramatic adoption of e-commerce following the beginning of the COVID-19 pandemic. In reality, greater than half of Etsy’s 2020 energetic consumers, and 37% of recent consumers got here again to make a purchase order in 2021. Along with gaining market share, driving wonderful purchaser engagement, constructing Etsy’s model globally and serving to our sellers develop, we continued to handle our folks, communities, and the planet. We’re additionally leveraging Etsy’s operational playbook for our most up-to-date acquisitions — Depop and Elo7 — which, alongside Reverb, increase the attain of our overarching mission to ‘Hold Commerce Human’.”

“We capped off the 12 months with high and backside line fourth quarter outcomes forward of our expectations, as Etsy’s capital-light enterprise mannequin drove excessive flow-through of incremental income,” stated Rachel Glaser, Etsy’s Chief Monetary Officer. “We grew income and GMS over 30% for the complete 12 months, powered by product investments that improved conversion and repeat buy price, and by advertising investments that elevated model consciousness and additional drove purchaser retention and frequency. Moreover, we delivered full 12 months adjusted EBITDA margin of 31% even whereas including two new firms to our “Home of Manufacturers” and growing our staff by 70%.”

Fourth Quarter and Full Yr 2021 Monetary Abstract
(in 1000’s, besides percentages; unaudited)

The monetary outcomes of Elo7 and Depop have been included in our consolidated monetary outcomes from July 2, 2021 and July 12, 2021 (the dates of acquisition), respectively. The GAAP and non-GAAP monetary measures and key working metrics we use are:

Fourth Quarter 2021 Working Highlights

Etsy

Choose highlights of fourth quarter enterprise initiatives for the Etsy market are outlined beneath:

Product: Our major focus in 2021 was to enhance buyer experiences throughout the Etsy market to have interaction and retain the tens of millions of consumers who discovered Etsy for the primary time or discovered us once more throughout this era. These are just some of our initiatives throughout the fourth quarter, aligned with our “Proper to Win” technique.

• We continued to have interaction consumers alongside their Etsy journey, together with by bettering pathways to indicate our breadth of stock, enhancing the triggers for focused purchaser outreach, increasing publish buy coupons, and driving app downloads. App obtain initiatives included well timed prompts, supply monitoring notifications, and app-exclusive Vacation gross sales, which, amongst different initiatives, drove a document setting 12 months for app downloads, up 47% versus 2020.
• We launched a number of new product initiatives to spotlight Etsy as a key gifting vacation spot together with an interactive Present Finder Hub.
• We have elevated the quantity of real-time information we will use to seize semantic which means throughout all of our stock by making additional investments in XWalk, our large-scale, real-time graph retrieval engine. XWalk ended the 12 months using 50% extra information factors than when it was launched within the second quarter of 2021, supporting our potential to serve consumers extra personalised search outcomes. In the course of the fourth quarter, we included varied extra information, equivalent to estimated supply dates, real-time in-session options, and itemizing data to enhance natural search outcomes. We additionally started laying the inspiration to use XWalk to non-U.S. searches.
• Our worldwide staff improved vendor onboarding, launched a non-U.S. model of the present finder expertise, expanded estimated supply date protection, and launched installment funds within the United Kingdom, Spain, and Australia.
• Our important work round supply transparency yielded robust outcomes: practically 100% of U.S. listings within the fourth quarter included anticipated supply date and origin zip code data and roughly 98% of U.S. listings had monitoring protection. As well as, 90% of U.S. home orders that have been estimated to be delivered in time for the vacations arrived on time, up considerably from the 2020 vacation season. As well as, we utilized refined information fashions to anticipate vacation delays and dynamically modify supply dates.
• Etsy Star Sellers, those that have achieved a newly-introduced badge aligned with sure customer support requirements, represented 31% of our fourth quarter GMS. We elevated Star Vendor visibility to consumers and added academic enhancements to the vendor dashboard. Our new “Promote on Etsy” app, with added options equivalent to simple video importing, noticed elevated engagement, and we started to roll it out to worldwide sellers.

Advertising: We continued to optimize spend throughout our advertising channels, with specific deal with growing the proportion of spend to upper- and mid-funnel channels, and launching inventive new advertising campaigns that concentrate on frequency enhancements.

• For Vacation 2021, we strengthened Etsy because the go-to vacation spot to buy and present meaningfully – together with by means of initiatives that inspired early looking for vacation gross sales. We promoted holidays that we’ve not previously, together with Diwali, Singles Day, and Introduction, and highlighted Etsy’s reference to inventive entrepreneurs by means of on-site options equivalent to “Vendor Spotlights.”
• Efficiency advertising highlights embrace bettering chargeability for Offsite Adverts with efforts to optimize vendor gross sales, refining our attribution fashions, and using our CRM instruments to reengage consumers. We additionally expanded efficiency advertising spend into seven non-core geographies.
• Our social advertising efforts to “have fun small” broke by means of the noise of Cyber Week. For instance, our posts throughout this peak vacation procuring weekend had tens of 1000’s of complete engagements every. Person-generated course of and itemizing movies continued to drive robust engagement throughout our social channels.
• New purchaser advertising initiatives included out of residence campaigns within the United Kingdom, podcasts in the USA, and reductions and promotions on paid social channels. We additionally targeted on growing Etsy’s consciousness amongst male audiences, together with by means of strategic placements on TV and YouTube and male-gifting targeted influencer partnerships.

Affect Pillars: Throughout 2021, we continued to make progress on our Affect technique to replicate the constructive influence we need to have on the world whereas advancing and complementing our enterprise technique. Listed below are some highlights for the fourth quarter and full 12 months:

• In 2021, Etsy sellers contributed $14.3 billion to the U.S. economic system, a 167% enhance from our baseline of $5.37 billion in 2018. This created 3.8 million jobs within the unbiased employee economic system, sufficient jobs to make use of virtually all the metropolis of Los Angeles, California, and generated $3.8 billion in earnings for sellers.
• Etsy continued to draw and retain world-class expertise in 2021, with a eager deal with range. In 2021, Etsy, together with Reverb, grew our management degree worker inhabitants who determine as a member of an underrepresented neighborhood (Black, Latinx, or Native American; collectively, “URC”) by 41.7%, and from 8.6% to 9.4% of our general management degree worker inhabitants. Hires from URCs constituted 16.7% of U.S. Etsy.com hires in 2021. The proportion of U.S. Etsy.com workers who’re from URCs has elevated from 8.6% in 2018 to 12.9% in 2021.
• To interact consumers within the constructive influence they create by procuring on Etsy.com, we launched an Affect Tracker that creates a customized digest of a purchaser’s actions, such because the variety of supported outlets, environmental influence, and Uplift fund contribution.

We have made important progress integrating Depop and Elo7 throughout the fourth quarter. Listed below are just a few operational highlights for our subsidiary marketplaces:

Etsy Market Transaction Price Enhance

Etsy additionally introduced at this time that its vendor transaction payment is growing from 5% to six.5%. This payment change will go into impact on April 11, 2022. We’re planning to take a position much more in making Etsy the very best place to run a inventive enterprise – the truth is, we count on to take a position many of the incremental income from this payment enhance in advertising, vendor instruments, and creating world-class buyer experiences.

Mr. Silverman commented, “Etsy allows anybody with a inventive concept to begin a enterprise and attain a built-in viewers of greater than 90 million consumers. Now we have demonstrated our potential to make enhancements that immediately translate into extra gross sales for our sellers, as evidenced by document gross sales per vendor in 2021. Our new transaction payment will allow us to spend money on key areas like advertising and help to additional prolong our robust momentum.”

Monetary Steering and Outlook

Etsy’s steerage for consolidated GMS, income, and Adjusted EBITDA for the primary quarter of 2022 is:

Concerning Etsy’s outlook, Mr. Silverman commented, “Whereas instances stay unsure, our ambition is steadfast and daring. We imagine Etsy can turn into the start line for a purchaser’s e-commerce journey. In 2022 we plan to double down on frequency and belief constructing initiatives that encourage consumers with an Etsy that feels extra ‘made for you’ and dependable, to drive purchaser and vendor loyalty. We’ll even be targeted on strengthening the inspiration of our ‘Home of Manufacturers,’ scaling our infrastructure and safeguards to effectively and sustainably energy our development, and fostering an equitable and productive setting for our folks. We’re simply getting began executing on our long-term development technique, targeted on extremely differentiated and defensible aggressive benefits inside what we imagine is a gigantic, $2 trillion complete out there retail marketplace for our related classes in our core markets, the place the Etsy market’s 2021 GMS represents simply 2.6% of the $466 billion on-line portion.”

Ms. Glaser added, “Even with out the numerous tailwinds of stimulus checks and lockdowns, our first quarter 2022 steerage displays our expectation that we are going to hold all the positive aspects made in 2021 – indicating our perception within the sturdiness of the final two years’ development. Moreover, assuming secure macroeconomic situations, we at the moment count on decrease GMS development 12 months over 12 months within the first half of 2022 and better GMS development within the second half, given the more difficult comparisons within the first half. And we’ll proceed to spend money on our folks, product improvement, advertising, expertise, and vital infrastructure to scale our enterprise.”

Webcast and Convention Name Info

Etsy will host a video webcast convention name to debate these outcomes at 5:00 p.m. Japanese Time at this time, which will probably be live-streamed through our Investor Relations web site (buyers.etsy.com) underneath the Occasions part. These thinking about submitting questions throughout the earnings name can accomplish that through the use of the Q&A chat window, which will probably be out there throughout the webcast. A replica of the earnings name presentation may even be posted to our web site.

A replay of the video webcast will probably be out there by means of the identical hyperlink following the convention name beginning at 8:00 p.m. Japanese Time this night, for a minimum of three months thereafter.

About Etsy

Etsy, Inc. operates two-sided on-line marketplaces that join tens of millions of passionate and artistic consumers and sellers around the globe. These marketplaces share a mission to “Hold Commerce Human,” and we’re dedicated to utilizing the ability of enterprise to strengthen communities and empower folks. Our major market, Etsy.com, is the worldwide vacation spot for distinctive and artistic items. Consumers come to Etsy to be impressed and delighted by objects which are crafted and curated by inventive entrepreneurs. For sellers, we provide a spread of instruments and companies that deal with key enterprise wants.

Etsy, Inc.’s “Home of Manufacturers” portfolio additionally contains vogue resale market Depop, musical instrument market Reverb, and Brazil-based handmade items market Elo7. Every Etsy, Inc. market operates independently, whereas benefiting from shared experience in product, advertising, expertise, and buyer help.

Etsy was based in 2005 and is headquartered in Brooklyn, New York.

Etsy has used, and intends to proceed utilizing, its Investor Relations web site and the Etsy Information Weblog (weblog.etsy.com/information) to reveal materials personal data and to adjust to its disclosure obligations underneath Regulation FD. Accordingly, you must monitor our investor relations web site and the Etsy Information Weblog along with following our press releases, SEC filings, and public convention calls and webcasts.

Investor Relations Contact:

Deb Wasser, Vice President, Investor Relations and ESG Engagement
[email protected]

Media Relations Contact:

Sarah Marx, Director, Company Communications
[email protected]

Cautionary Assertion Concerning Ahead-Trying Statements

This press launch incorporates or references forward-looking statements throughout the which means of the federal securities legal guidelines. Ahead-looking statements embrace statements referring to our monetary steerage for the primary quarter of 2022 and key drivers thereof; our alternative; the influence of our “Proper to Win” and different development methods, together with our methods for integrating our “Home of Manufacturers” marketplaces, advertising and product initiatives, and investments and different levers of development on our enterprise and working outcomes, together with future GMS and income development;  our potential to draw, have interaction, and retain consumers and sellers; our newly introduced transaction payment enhance and plans for market investments; strategic investments or acquisitions and the potential advantages thereof; our meant environmental and social impacts; the unsure macroeconomic setting and impacts that the COVID-19 pandemic could have on our enterprise, technique, working outcomes, key metrics, monetary situation, profitability, and money flows; modifications in general ranges of client spending and e-commerce usually; and volatility within the international economic system. Ahead-looking statements embrace all statements that aren’t historic details. In some instances, forward-looking statements could be recognized by phrases equivalent to “intention,” “anticipate,” “imagine,” “may,” “allow,” “estimate,” “count on,” “objective,” “intend,” “could,” “outlook,” “plan,” “potential,” “goal,” “will,” or comparable expressions and by-product varieties and/or the negatives of these phrases.

Ahead-looking statements contain substantial dangers and uncertainties that will trigger precise outcomes to vary materially from people who we count on. These dangers and uncertainties embrace: (1) our potential to proceed our speedy development; (2) dangers associated to the continued COVID-19 pandemic, which continues to influence our enterprise and outcomes of operations in quite a few unstable and unpredictable methods, in addition to dangers of reversal of the shift to e-commerce when the pandemic abates; (3) the fluctuation of our quarterly working outcomes; (4) our failure to satisfy our publicly introduced steerage or different expectations; (5) our potential to efficiently execute on our enterprise technique or if our technique proves to be ineffective; (6) our potential to draw and retain energetic and engaged communities of sellers and consumers; (7) macroeconomic occasions which are outdoors of our management; (8) our potential to recruit and retain workers; (9) the significance to our success of the trustworthiness of our marketplaces and the connections inside our communities; (10) our potential to reinforce our present choices and develop new choices to answer the altering wants of sellers and consumers; (11) the effectiveness of our advertising efforts; (12) the effectiveness of our cell options for sellers and consumers; (13) our potential to increase our enterprise in our core geographic markets; (14) regulation within the space of privateness and safety of person information; (15) our dependence on third-party fee suppliers; (16) our potential to efficiently combine the Depop and Elo7 acquisitions and execute on our “Home of Manufacturers” technique; (17) acquisitions that will show unsuccessful or divert administration consideration; and (18) the potential misuse or disclosure of delicate details about members of our communities and the potential for cyber-attacks. These dangers and uncertainties are extra totally described in our filings with the Securities and Trade Fee, together with within the part entitled “Danger Elements” in our Quarterly Report on Type 10-Q for the quarter ended September 30, 2021, and subsequent stories that we file with the Securities and Trade Fee. Furthermore, we function in a really aggressive and quickly altering setting. New dangers emerge once in a while. It’s not potential for our administration to foretell all dangers, nor can we assess the influence of all elements on our enterprise or the extent to which any issue, or mixture of things, could trigger precise outcomes to vary materially from these contained in any forward-looking statements we could make. In gentle of those dangers, uncertainties and assumptions, we can’t assure future outcomes, ranges of exercise, efficiency, achievements, or occasions and circumstances mirrored within the forward-looking statements will happen.

Ahead-looking statements characterize our beliefs and assumptions solely as of the date of this press launch. We disclaim any obligation to replace forward-looking statements.

Forex-Impartial GMS Development

We calculate currency-neutral GMS development by translating present interval GMS for items bought that have been listed in non-U.S. greenback currencies into U.S. {dollars} utilizing prior 12 months overseas forex trade charges.

As reported and currency-neutral GMS development for the intervals introduced beneath is as follows:

Non-GAAP Monetary Measures

Adjusted EBITDA and Adjusted EBITDA Margin

On this press launch, we offer Adjusted EBITDA, a non-GAAP monetary measure that represents our internet earnings adjusted to exclude: curiosity and different non-operating expense, internet; (profit) provision for earnings taxes; depreciation and amortization; stock-based compensation expense; overseas trade (acquire) loss; acquisition-related bills; and loss on extinguishment of debt. We additionally present Adjusted EBITDA margin, a non-GAAP monetary measure that presents Adjusted EBITDA divided by income. Beneath is a reconciliation of Adjusted EBITDA to internet earnings, probably the most immediately comparable GAAP monetary measure. With respect to our expectations underneath “Monetary Steering and Outlook” above, reconciliation of Adjusted EBITDA and Adjusted EBITDA margin steerage to the closest corresponding GAAP measure is just not out there with out unreasonable efforts on a forward-looking foundation as a result of excessive variability, complexity, and low visibility with respect to the costs excluded from these non-GAAP measures; specifically, stock-based compensation expense, overseas trade (acquire) loss, and acquisition-related and different non-recurring bills can have unpredictable fluctuations based mostly on unexpected exercise that’s out of our management and/or can’t fairly be predicted.

Now we have included Adjusted EBITDA and Adjusted EBITDA margin as a result of they’re key measures utilized by our administration and Board of Administrators to judge our working efficiency and tendencies, allocate inner sources, put together and approve our annual finances, develop short- and long-term working plans, decide incentive compensation, and assess the well being of our enterprise. As our Adjusted EBITDA will increase, we’re capable of make investments extra in our platforms.

We imagine that Adjusted EBITDA and Adjusted EBITDA margin can present helpful measures for period-to-period comparisons of our enterprise as they take away the influence of sure non-cash objects and sure variable costs.

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical instruments, and you shouldn’t take into account them in isolation or as an alternative to evaluation of our outcomes as reported underneath GAAP. A few of these limitations are:

• Adjusted EBITDA doesn’t replicate different non-operating bills, internet of different non-operating earnings, together with internet curiosity expense;
• Adjusted EBITDA doesn’t replicate tax funds that will characterize a discount in money out there to us;
• though depreciation and amortization are non-cash costs, the belongings being depreciated and amortized could have to get replaced sooner or later, and Adjusted EBITDA doesn’t replicate money capital expenditure necessities for such replacements or for brand new capital expenditure necessities;
• Adjusted EBITDA doesn’t take into account the influence of stock-based compensation expense;
• Adjusted EBITDA doesn’t take into account the influence of overseas trade (acquire) loss;
• Adjusted EBITDA doesn’t replicate acquisition-related bills;
• Adjusted EBITDA doesn’t take into account the influence of the loss on extinguishment of debt; and
• different firms, together with firms in our business, could calculate Adjusted EBITDA in another way, which reduces its usefulness as a comparative measure.

Due to these limitations, you must take into account Adjusted EBITDA and Adjusted EBITDA margin alongside different monetary efficiency measures, together with internet earnings, income, and our different GAAP outcomes.

SOURCE Etsy, Inc.