Why Etsy’s Q1 Beat Was Not Nearly Good Enough

By Chris Lange Updated Jan 6, 4:49AM EST · Published May 9, 11:10AM EDT

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Why Etsy’s Q1 Beat Was Not Nearly Good Enough — © Woodkern / Getty Images

When Etsy Inc. (NASDAQ: ETSY) released its first-quarter financial results after the markets closed on Wednesday, the e-commerce company said that it had $0.24 in earnings per share (EPS) and $169.3 million in revenue. Consensus estimates had called for $0.14 in EPS and $170.06 million. In the same period of last year, Etsy said it had EPS of $0.10 on $120.91 million in revenue.

During the latest quarter, Gross merchandise sales (GMS) increased 18.9% year over year to $1.02 billion. GMS per active buyer on a trailing 12-month basis was up nearly 2% and has generated growth of nearly 2% or higher for the past three consecutive quarters.

International GMS was 38% of overall GMS, and they increased 33% year-over-year on a currency-neutral basis, Etsy’s highest international GMS growth since the beginning of 2015.

Active buyers grew 18.3% year over year, despite a reduction in marketing spend across certain channels. At the same time, active sellers grew 13.0%.

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Looking ahead to the 2019 full year, revenues are expected to be in the range of $785 million to $797 million and GMS between $4.6 billion and $4.8 billion. The consensus estimates are $0.68 in EPS and $792.42 million in revenue for the year.

Josh Silverman, Etsy CEO, commented:

We are pleased to report another quarter of strong growth. We began the year with a fresh slate of product initiatives and our teams’ development velocity surged to an all-time high, delivering healthy GMS growth during the quarter. We are focused on unlocking Etsy’s long-term growth opportunity by bolstering best-in-class search and discovery, leveraging human connections, building a trusted brand, and showcasing our vast collection of unique items.

Shares of Etsy were last seen down almost 11% at $60.66, in a 52-week range of $28.60 to $73.35. The consensus price target is $74.00
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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.