Etsy, Inc. Reports Fourth Quarter and Full Year 2018 Financial Results
Strong Fourth Quarter Year-Over-Year GMS Growth of 22.3% and Revenue Growth of 46.8%
Issues 2019 Financial Guidance

Brooklyn, NY - February 25, 2019 - Etsy, Inc. (NASDAQ: ETSY), the global marketplace for unique and creative goods, today announced financial results for its fourth quarter and full year ended December 31, 2018.
 
“By making Etsy a great destination for holiday shopping, we delivered strong fourth quarter results to end an excellent year,” said Josh Silverman, Etsy, Inc. Chief Executive Officer. “On a currency-neutral basis, 2018 gross merchandise sales grew 20.4% to $3.9 billion for the year, revenue was up 36.8% to $603.7 million for the year, and we improved our margins. We kept our focus on improving search and discovery, building trust in the marketplace, expanding our marketing channels, and investing in services that fuel our sellers’ success.”

Fourth Quarter and Full Year 2018 Financial Summary
(in thousands except percentages; unaudited)

 
Three Months Ended 
 December 31,
 
% Growth
(Decline)
Y/Y
 
Year Ended 
 December 31,
 
% Growth
(Decline)
Y/Y
 
2018
 
2017
 
 
2018
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
 
GMS
$
1,246,472

 
$
1,019,452

 
22.3
 %
 
$
3,931,745

 
$
3,253,609

 
20.8
 %
Revenue
$
200,028

 
$
136,268

 
46.8
 %
 
$
603,693

 
$
441,231

 
36.8
 %
Marketplace revenue
$
150,540

 
$
102,261

 
47.2
 %
 
$
440,740

 
$
326,076

 
35.2
 %
Services revenue
$
48,622

 
$
34,309

 
41.7
 %
 
$
158,928

 
$
111,869

 
42.1
 %
Net income
$
41,251

 
$
44,750

 
(7.8
)%
 
$
77,491

 
$
81,800

 
(5.3
)%
Adjusted EBITDA
$
51,359

 
$
34,822

 
47.5
 %
 
$
139,510

 
$
80,009

 
74.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
Active sellers
2,115


1,933

 
9.4
 %
 
2,115

 
1,933

 
9.4
 %
Active buyers
39,447


33,364

 
18.2
 %
 
39,447

 
33,364

 
18.2
 %
Percent mobile GMS
56
%
 
52
%
 
400
 bps
 
55
%
 
51
%
 
400
 bps
Percent international GMS
36
%
 
33
%
 
300
 bps
 
35
%
 
33
%
 
200
 bps

For information about how we define our metrics, see our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, except for Marketplace revenue and Services revenue, which are described below.
“Our strong financial performance in the fourth quarter and full year of 2018 reflect the successful execution of our product, engineering, and marketing efforts during the period,” said Rachel Glaser, Etsy, Inc. Chief Financial Officer. “We grew and strengthened our business, returned capital to stockholders, and finished the year in a strong cash position enabling continued growth investments.”

Fourth Quarter 2018 Operational Results
We delivered a strong holiday shopping period in the fourth quarter. In particular, GMS from Thanksgiving through Cyber Monday, the five key shopping days, was up 30% compared to the same period last year, driven primarily by product launches, marketing, and improved landing page experiences. Among other initiatives, we improved the browsing experience by utilizing discovery badges that guide buyers throughout the marketplace and through the Etsy Gift Finder, which enabled buyers to find unique items based on personalized inputs.
International GMS was 36% of overall GMS, and increased 32% year-over-year on a currency-neutral basis, driven by GMS between U.S. buyers and international sellers and by our fastest growing international trade route, international domestic, which is GMS generated between a non-U.S. buyer and a non-U.S. seller both in the same country. Within the international domestic trade route, the United Kingdom, one of our six core markets, reached record GMS levels during the quarter.
Shipping incentives and seller education led to a meaningful improvement in the number of items with competitive shipping prices and practices. During the holiday shopping period, nearly 80% of items were available to ship domestically at competitive prices, and 33% of those items were available to ship for free.


The following information was filed by Etsy Inc (ETSY) on Monday, February 25, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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