Slide 1: Q1 2024 Financial Results
Q1 2024 Financial Results May 1, 2024
Slide 2: Forward-looking Statements
2 Forward-looking This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include but are not limited to: statements relating to our financial guidance for the second quarter 2024 and outlook for full year 2024 and underlying
Slide 3: Q1 24 Consolidated results in line with guidance
3 Q1 24 Consolidated results in line with guidance Etsy marketplace GMS Q1 24 Consolidated GMS Q1 24 Consolidated Revenue Q1 24 Consolidated Adj. EBITDA was $2.6 billion, down 5.3% Y/Y*, a bit of a disappointment as $3.0B $646M $168M March GMS did not -3.7% Y/Y and -4.1% +0.8% Y/Y 26.0% Adj. EBITDA
Slide 4: Product Development & Marketing investments improving customer experiences
4 Product Development & Marketing investments improving customer experiences FPO Signs that efficiency is even higher Paid marketing efficiencies Full funnel activations in our Product Development teams: include: across channels to ● Double digit growth in # of ● In-sourcing of Etsy paid support Gift
Slide 5: Consideration
5 Consideration Get buyers to think of Etsy more often Gift ModeTM + Loyalty Program Quality Great Value Reliability Make it easier to find Drive association that there Make shopping on Etsy ‘the good stuff’ on Etsy are great deals on Etsy more convenient Machine learning investments in Highlighting
Slide 6: Making Etsy the destination for gifting: successful launch of Gift Mode
6 Making Etsy the destination for gifting: successful launch of Gift Mode Q1 24 Etsy sitewide ‘Gifting’ GMS meaningfully outpaced overall Etsy marketplace performance - up low single digits Y/Y. We also significantly outgrew select online gifting-focused peers* Football’s ‘Big Game’ Ad Drew Barrymore
Slide 7: Robust roadmap to continue elevating the Gifting experience
7 We have a robust roadmap to continue elevating the Gifting experience! “Gift Teasers” Video messages Occasion Shopping within Gift Mode
Slide 8: Highlighting the very best of Etsy: suppress and remove
8 Doing more than ever to ensure we highlight the very best of Etsy - differentiating Etsy in a sea of commoditized merchandise Suppress & Remove Listings that violate Etsy’s policies
Slide 9: Highlighting the very best of Etsy: elevate
9 Doing more than ever to ensure we highlight the very best of Etsy - differentiating Etsy in a sea of commoditized merchandise Suppress & Elevate Remove better-quality listings in Search & Listings that violate Recommendations Etsy’s policies
Slide 10: Highlighting the very best of Etsy: curate and organize
10 Doing more than ever to ensure we highlight the very best of Etsy - differentiating Etsy in a sea of commoditized merchandise Suppress & Elevate Curate Organize Remove better-quality the marketplace to …quality listings on listings in Search & show the newest and our marketplace Listings that vio
Slide 11: Re-establishing our point of differentiation onsite
11 As we firmly re-establish our point of differentiation onsite, we’ll also tell that story in our marketing
Slide 12: Progress on Consideration: Great Value and better Reliability
12 Progress on driving Consideration by …And even better Reliability offering Great Value… Seller specials & New machine learning 'hot deals' signals "Growth Page" model aimed at reducing USPS transit times by greater than one day. 3x % of eligible orders for which Etsy is now able to show an Estima
Slide 13: Working to increase app downloads and visits
13 Working to increase app downloads and visits, and improve the app experience Purchase days per app users are 75% higher than non-app users Driving downloads and visits onsite and offsite Welcoming new app users
Slide 14: Q1 Consolidated Results in line with guidance
14 Q1 24 Consolidated Results in line with guidance Consolidated Results Q1 24 GMS Q1 24 Revenue Q1 24 Adjusted EBITDA* $3.0B $646M $168M -3.7% Y/Y, -4.1% currency neutral basis +0.8% Y/Y 26.0% Adj. EBITDA Margin *Reconciliation of non-GAAP financial measures is contained in the Appendix.
Slide 15: Leverage gained in Product Development and revenue per headcount
15 We gained leverage in Product Development and increased revenue per headcount Consolidated Q1 24 Product Dev spend Etsy marketplace headcount reflects leverage gained as a % of revenue returns to Q1 2022 levels -5.2% Revenue per headcount up ~2% Y/Y* * Based on revenue and average headcount for TT
Slide 16: Marketing is an important lever to support our Vital Few priorities
16 Marketing is an important lever to support our Vital Few priorities Consolidated Marketing Spend Consolidated Performance & Brand Marketing Spend as a % of Revenue Y/Y increase primarily related to expanded Etsy +2.4% marketplace product feeds Y/Y testing across PLA and paid social, and scaled up
Slide 17: Discretionary wallet share has been on a steady decline
17 Discretionary wallet share And our specific categories has been on a steady decline had a challenging Q1 24 since early 2021 U.S. Discretionary Goods Spend* as a % of Total Personal Q1 24 U.S. ‘Pure Play’ eCommerce Peer Company1 Sales Consumption Expenditures (Y/Y) (per BEA.gov, nominal dollars, T
Slide 18: Top 6 categories represented ~87% of GMS in Q1 24
18 1Q 24 Etsy marketplace top 6 categories approximate % GMS Top 6 categories represented ~87% of GMS in Q1 24 Y/Y down Y/Y down Y/Y down Y/Y down Y/Y down Y/Y down mid-single digits mid-single digits low-single digits mid-single digits low-single digits low-single digits Metrics presented represent
Slide 19: Growth of active buyers is a bright spot
19 19 Growth of active buyers is a bright spot, remaining at record levels Q1 24 Active Buyers Q1 24 New Buyers Q1 24 GMS / Active Buyer1 91.6M 5.7M $125 +1.9% Y/Y -14.5% Y/Y -3.5% Y/Y Q1 24 Repeat Buyers Q1 24 Habitual Buyers Q1 24 Reactivated Buyers 37M 7M 6.3M +2.9% Y/Y -2.9% Y/Y +5.9% Y/Y Metric
Slide 20: Subsidiary brands grew GMS in Q1 24
20 Our subsidiary brands grew GMS in Q1 24, and were additive to consolidated top-line GMS growth ● Grew GMS Y/Y; outpaced musical instruments ● Very strong Y/Y GMS growth; particularly in the industry U.S. ● Continued to highlight affordability messaging and ● Removed selling fees in U.K. to encour
Slide 21: Capital light business model delivers healthy balance sheet and cash flow
21 Capital light business model delivers a healthy balance sheet and strong cash flow Trailing Twelve Month Consolidated Free Cash Flow ($M) Cash Balance 3/31/241 $1.1B Q1 24 Consolidated Free Cash Flow $59M In Q1 2024, we converted approx. 90% of our Adj. EBITDA to free cash flow on a trailing twelve
Slide 22: Q2 24 Guidance and FY 24 Outlook
22 Q2 24 Consolidated Guidance and FY 24 Outlook as of May 1, 2024 Q2 24 Guidance FY 24 Outlook GMS The year-over-year decline in consolidated Q2 With a range of potential outcomes for the full 24 GMS is expected to be similar to our actual year, our current view suggests a modest Q1 24 performance
Slide 23: Q&A
23 Q&A
Slide 24: Appendix
24 Appendix
Slide 25: Notes for Slide 17: Consumer Edge Data
25 Notes for Slide 17: Consumer Edge Data Top 15 pure-play U.S. companies* in each relevant category ● Home & Living: Wayfair, Pottery Barn, Ikea, Bed Bath & Beyond, West Elm, Restoration Hardware, CB2, William Sonoma, Nectar Sleep, Pottery Barn Kids, Empire Today, Dyson, Ruggable, Saatva, Ashley Fu
Slide 26: Etsy Marketplace Active Buyers
26 Etsy Marketplace Active Buyers +1.9% Y/Y Modest growth in U.S. International growth remained strong ~4% Y/Y increase in active buyers who identify as men Active buyers are buyers who have made at least one purchase in the last 12 months.
Slide 27: New Buyers and Reactivated Buyers
27 New Buyers Reactivated Buyers A buyer is considered new if they use a unique e-mail address that has never been used for a purchase on *Average reactivated buyers pre-COVID is average of quarterly data for the periods Q1 2017 through the Etsy marketplace. Metrics presented are for the Etsy market
Slide 28: Etsy Marketplace TTM GMS per Active Buyer
28 Etsy Marketplace TTM GMS per Active Buyer (Q/Q) $135 $131 $129 $128 $127 $126 $125
Slide 29: Etsy Marketplace GMS by Geography
29 Etsy Marketplace GMS (by Geography %) GMS Ex-U.S. Domestic GMS U.S. Domestic 48% 52% GMS Ex-U.S. Domestic = either buyer, seller, or both are located outside of the United States.
Slide 30: Condensed Consolidated Balance Sheets
30 Condensed As of March 31, 2024 As of December 31, 2023 Consolidated (in thousands) Cash and cash equivalents $ 788,837 $ 914,323 Balance Sheets Short-term investments 254,875 236,118 Accounts receivable, net 16,542 24,734 Funds receivable and seller accounts 239,532 265,387 Property and equipment
Slide 31: Condensed Consolidated Statement of Operations
31 Condensed Three months Three months Consolidated ended 3/31/24 ended 3/31/23 (in thousands) Statement of Revenue $ 645,954 $ 640,877 Cost of revenue 187,133 195,453 Operations Gross profit Marketing 458,821 191,811 445,424 171,314 Product development 109,846 115,924 General and administrative 89,0
Slide 32: Condensed Consolidated Statement of Cash Flows
32 Condensed Three months ended 3/31/24 Three months ended 3/31/23 Consolidated (in thousands) Net income $ 63,004 $ 74,537 Statement of Net cash provided by operating activities 69,033 55,631 Net cash used in investing activities (25,106) (36,097) Cash Flows Net cash used in financing activities (16
Slide 33: Reconciliation of Quarterly Net Income to Adj. EBITDA
33 Reconciliation of Quarterly Net Income to Adj. EBITDA 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 (in thousands) Net income $ 63,004 $ 83,266 $ 87,850 $ 61,915 $ 74,537 $ 109,548 Excluding: Interest and other non-operating income, net (5,310) (4,904) (5,430) (5,934) (5,689) (2,865) Provision (benefit) for incom
Slide 34: Reconciliation of Operating Cash Flow to Free Cash Flow
34 Reconciliation of Operating Cash Flow to Free Cash Flow Free cash flow is considered to be a non-GAAP financial measure. We believe that free cash flow, which measures our ability to generate cash from our business operations, is an important financial measure for use in evaluating the company's finan
Slide 35: Reconciliation of Operating Cash Flow to Free Cash Flow
35 Reconciliation of Operating Cash Flow to Free Cash Flow Free cash flow is considered to be a non-GAAP financial measure. We believe that free cash flow, which measures our ability to generate cash from our business operations, is an important financial measure for use in evaluating the company's finan