Etsy beats Q3 expectations but delivers light outlook

Etsy published its third quarter financial results on Wednesday, beating market expectations but delivering a light Q4 outlook. 

The company posted a Q3 net income of $89.9 million, down 2% year-over-year, with diluted earnings per share of 62 cents.  The decline in net income was due to acquisition-related expenses and non-cash amortization for the acquisitions of Depop and Elo7. Revenue came to  $532.4 million, up 17.9% versus a year prior.

Wall Street was expecting earnings of 54 cents a share on revenue of $518.86 million. 

“Last year, Etsy dramatically outperformed e-commerce industry benchmarks, and now, in 2021, we’re lapping that performance with flying colors, reinforcing the significant market share gains we have made,” CEO Josh Silverman said in a statement. “Our excellent third quarter results further reflect that we’re moving the needle on frequency, and that many of the millions of buyers who found, or re-found Etsy during the pandemic are sticking with us, and performing even better than historical cohorts. We are also making great progress integrating our newest brands, Depop and Elo7, aligning their investment priorities, as well as Reverb’s, to those areas where we see opportunity for significant value creation.”

The company’s Gross Merchandise Sales (GMS) increased by 17.9% to $3.1 billion, while Etsy marketplace GMS was $2.7 billion, up 12.4% year-over-year. Excluding face masks, Etsy marketplace GMS grew 23.7% year-over-year.

Etsy ended the quarter with 95 million active buyers, up 37.8% year-over-year. It had 7.46 million active sellers, up 102.7%.

Looking ahead, the company expects fourth quarter revenue in the range of $660 million to $690 million, compared to analyst estimates for revenue of $689.94 million.