Etsy Earnings: When Incredible Isn't Good Enough

When Etsy Inc. (NASDAQ: ETSY) reported its second-quarter financial results after the markets closed on Wednesday, the e-commerce firm said that it had $0.75 in earnings per share (EPS) and $428.74 million in revenue. That compared with consensus estimates of $0.42 in EPS and $334.9 million in revenue, as well as the $0.14 per share and $181.10 million posted in the same period of last year.

During the most recent quarter, revenues grew 136.7% year over year. Marketplace revenues increased 145.6% to $332.0 million, and Services revenue increased 110.7% to $96.71 million.

Gross merchandise sales (GMS) grew 145.6% in the quarter to a total of $2.69 billion. GMS growth excluding mask sales for the Etsy marketplace was 93%, up $1.0 billion, and 14% of the Etsy marketplace’s overall GMS was from mask sales.

Etsy marketplace’s GMS per active buyer on a trailing 12-month basis grew 5% year over year and 6% excluding masks, higher than the record growth reached last quarter and evidence that the company drove an increase in frequency during the second quarter.

In the second quarter, the Etsy marketplace delivered 11.5 million new buyers and 7.2 million reactivated buyers who haven’t purchased in a year or more. Consolidated active buyers grew 41.0%, and active sellers grew 34.6%.

Etsy said cash, cash equivalents and short- and long-term investments totaled $1.1 billion at the end of the quarter.

Looking ahead to the third quarter, the company expects to see revenues in the range of $366 million to $426 million, with GMS of $2.2 billion to $2.5 billion. Consensus estimates call for $0.21 in EPS and $278.66 million in revenue for the quarter.

Etsy stock traded down about 5% early Thursday to $128.88, in a 52-week range of $29.95 to $136.29. The consensus price target is $107.88.

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