Etsy just released its financial results for 2019's third quarter (July to September) - here are the highlights:

  • marketplace sales up 30.1% to $1.2 billion - but note that these sales include sales on Reverb, the site they bought earlier this year. Reverb's GMS was $76.9 million.
  • Etsy's revenue was up 31.6%, to almost $198 million
  • gross profit was up 24.7% to $129.0 million
  • Etsy's net income was $14.8 million 
  • revenue from the marketplaces was nearly $141 million, versus revenue from seller services which was only $56 million.
  • active buyers and active sellers on Etsy increased 19.1% and 19.3% year-over-year, respectively. This is the first time in a few years that sellers increased at a faster rate than buyers, but note that there were still way more buyers added this quarter than sellers. 
  • active sellers for the whole company are up to 2.5 million (remember, that counts anyone who has listed anything in the past 12 months), while active buyers (anyone who bought in the past 12 months) are at 44.8 million. 
  • 59% of sales happened on mobile devices. 
  • "As of the end of the third quarter, 62% of items on the Etsy marketplace offered free shipping to U.S. buyers and 74% of U.S. listing views were eligible to ship for free."
  • they say they are continuing to optimize Etsy Ads, and "have seen negligible budget churn from sellers"
  • the amount spent by each active buyer in the past 12 months grew for the sixth quarter
  • Etsy's gross margin was down a bit, due to the purchase of Reverb, Etsy Payments fees and the introduction of Etsy Ads (I expect they will give more detail during the call)
  • they spent $50 million on marketing this quarter, up from $39 million last year

 

Press release here: https://investors.etsy.com/press-releases/press-release-details/2019/Etsy-Inc-Reports-Third-Quarter-2019-Financial-Results/default.aspx

and here are the slides that go with the presentation: https://s22.q4cdn.com/941741262/files/doc_financials/2019/q3/Etsy-3Q-2019-Earnings-Presentation.pdf (I haven't looked at them yet)

 

The stock is down because Etsy lowered its guidance: https://www.marketwatch.com/story/etsy-stock-down-10-after-company-lowers-guidance-2019-10-30  although I am seeing the usual rise, then drop, then rise happening: https://www.google.com/search?q=Etsy+stock&pws=0&gl=us&gws_rd=cr  As always, it will take a while for everyone to digest the full report and call. 

 

The investor phone call starts at 5 pm ET; I will try to listen in & post highlights afterwards. A transcript of that call will eventually be posted here: https://seekingalpha.com/symbol/ETSY?news=transcripts  and usually elsewhere, within the next 48 hours. 

 

I will mark any key updates as "solutions" so the posts will be highlighted, and will add to this OP in the next hour for as long as I can edit it. 

 

My previous threads on quarterly results, for comparison:

2nd Q 2019

1st Q 2019

4th Q 2018

3rd Q 2018

2nd Q 2018

1st Q 2018

4th Q 2017

3rd Q 2017

cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@Gokojo  @DaysofYoreTreasures   I just opened a great bottle of wine from my recent wine country trip (so recent I have not yet been home a full 48 hours) . It's a cab franc - merlot blend from the Naramata Bench in British Columbia, if anyone wants any. 

I should have stayed there. Perhaps I could do SEO for the wineries - some of them need some website upgrades...

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DaysofYoreTreasures
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Ooh yes, please. I'll bring the popcorn. Should be there in about 30 hours, lol.

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@Gokojo  @DaysofYoreTreasures   just remember, I had to LISTEN  to all of this, without wine, for over an hour, then transcribe my notes to make some sense. Reading is much easier! 

(Thank you both for going over the transcript & pointing out  important things others will care about. Greatly appreciated!)

***hides wine from my partner so there is some left for Mary once she gets here

 

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Gokojo
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@cindylouwho2 I doubt I'll make it in time but as a past wine-knower, I had no idea BC made solid wines! Out of curiosity, do you get really good Pinot Noir up there like in the pacific northwest? 

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DaysofYoreTreasures
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@cindylouwho2 

You are most welcome Cindy! I don't know how you do what you do but it is awe-inspiring. We would be lost without you. ...and we don't know what we'd do without Cindy Lou...

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@Gokojo   oh, yes, there are good pinot noirs here. It is not my favourite varietal, but my partner loves it, so we try to find compromises. My current fave is one grown in the Similkameen Valley, west of the Okanagan - fantastic minerality. (The Okanagan is the northern extension of the Sonora Desert, and hotter than you would likely expect, so the pinots are usually grown a bit further north of the border. It is the only desert in Canada, & was 35 C when we were there in mid-June.) There is a good NYT article from close to 15 years ago that suggests wine lovers check the region out now before it gets spoiled. There are now 3x the wineries there were then. 

@DaysofYoreTreasures  LOL thanks! I'm not really doing enough lately. I need to make some hard decisions really soon. 

 

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FrenchPastTimes
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@DaysofYoreTreasures we have a set of carrots and sticks at our disposal to encourage sellers to adopt that, and @cindylouwho2We're just brainless donkeys to them.  I have donkeys and they are very smart, and you could try to beat them to go somewhere they don't want to go and they would not budge an inch, however, bring out a nice juicy carrot or two with obvious immediate rewards, and they will soon shift!!  I want to see the nice juicy carrots Etsy would offer as incentive if they want me to start losing money on shipping, or I would price myself right out of the market, which is what would happen if I set it up under their current system.  If everyone was forced to adopt 'free' shipping, the search/ placement/ ranking advantage would disappear.

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LittleGemsJewells
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Search was one of the few "incentives" they had to get sellers to comply. "  Should read . . . . . . . . .

Search was one of the few "threats" they had to get sellers to comply. " The imperative word being COMPLY.

 

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VermontLanyards
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Aside from the depressing issue my views and sales have dropped by 50% recently, and over the 8 years I've been here....its NEVER been this slow for me......I see why.    I also shop alot on Etsy and have gotten so frustrated recently when a search for jewerly especially comes up with cheap free ship items I could buy on Amazon.   The whole presentation looks cheaper now for just about everything I search for and it makes me wonder why I bother sometimes.    It is easy to understand how buyers who come to the site don't see any real difference between Etsy, Amazon and Ebay......except for a few obviously handmade quality items interspersed among the cheap crap from "you know where".   It also seems to be the desperation of sellers trying to stay afloat and the mad rush to the bottom with prices.    So......pushing irrelevant, cheap items to the from because of free shipping is destroying the shopping experience.   Etsy used to be like Pinterest for me......loving to find really beautiful handmade items.....not anymore.  

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MaisyGraceDesigns
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@FenderMineralsI am just a *little bit* sick of Etsy, oops...did I just say that out loud?  I know what you're saying about shops losing by following the advice Etsy is so sweetly handing out to us all--I'm sure there are many that use Etsy as a way to fund their hobby and make a little $$ as well and aren't dissecting true business costs.   

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FenderMinerals
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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I am sure there are more than you imagine. 

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LandandSeaGems
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Thanks for the report Cindy. Gonna read it all tomorrow when I can focus.

I wonder if they will walk back the page one priority at some point....once they get closer to 100% free shipping....as surfacing more relevant items seems like it should be a/the priority. I also wonder if early adopters of free ship removed some of what they originally rolled into the price because their sales dropped. 

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CatWomanVintage
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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LandAndSeaGems ~ I rolled back my prices after the first round with FSG and saw no pick up in sales. Sales dropped even further after second round, perhaps bc the relevant search is so awful, that I decided to forego FSG and take my chances. No sales And Free Shipping ~ no thank you.

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OneEyeCatStudio
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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I agree. Really, how many have actually done the testing and found out whether "free" shipping actually increased sales for their shop?

Etsy gave out a lot of threats and a lot of false information and simply intimidated numerous sellers.

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LandandSeaGems
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@OneEyeCatStudio  Hallie, that pic is going to give me nightmares. 

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OneEyeCatStudio
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@LandandSeaGems  good :)

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PUREWHITEDECO
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@LittleGemsJewells   

Search was one of the few "incentives" they had to get sellers to comply. "  Should read . . . . . . . . .

Search was one of the few "threats" they had to get sellers to comply. " The imperative word being COMPLY.

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StinsonPaperCompany
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Can someone please explain to me like I'm a fifth-grader what the difference is between linear and non linear context specific search ranking?

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MinxouriVintage
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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i think they mean straight line connecting x keyword search to item with x keyword in it.

vs 

me listing vintage 1970s bell bottom pants and getting thousands of views (correction: technically impressions) for lara croft holster belt  and an explanation, reason you're getting these impressions is you used the words wide and pants.

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@StinsonPaperCompany   I will be following up with them tomorrow if they don't make a simpler, more concrete statement then. They often release something the day after the quarterly report. 

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StinsonPaperCompany
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Thank you @MinxouriVintage  and @cindylouwho2 .  So this might explain irrelevant search results, particularly with respect to ads?

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LandandSeaGems
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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“The main difference between linear and non linear data structures is that linear data structures arrange data in a sequential manner while nonlinear data structures arrange data in a hierarchical manner, creating a relationship among the data elements.”

https://pediaa.com/what-is-the-difference-between-linear-and-non-linear-data-structures/

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@StinsonPaperCompany   they expressly stated that they planned on adding this change to ads, but haven't yet.

I do think that the irrelevant ads are a method of AI training, for surfacing relevant items when the seller hasn't used all of the search keywords.  We are starting to see slightly better ad results in some small searches, although they still have a long way to go. 

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@LandandSeaGems   thank you! I'm still hoping that Etsy will release a simple explanation for the folks who find tech talk too dense, but I am probably not going to get that LOL

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maydaylabels
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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I still don't get it

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