Etsy Q3 Earnings Miss Estimates, Stock Gains on Revenue Beat

Etsy ETSY shares jumped 7.19% to close at $51.44 on Thursday following the announcement of third-quarter 2024 results.Revenues advanced 4.1% year over year to $662.4 million. The figure beat the Zacks Consensus Estimate by 1.31%. Top-line growth was driven by accelerating Marketplace revenues.However, third-quarter 2024 earnings of 45 cents per share missed the Zacks Consensus Estimate by 16.67%. The bottom-line figure reflects a year-over-year decrease of 29.7%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Etsy announced a stock repurchase program worth $1 billion. In the third-quarter 2024, Etsy repurchased an aggregate of approximately $156 million, or 2.7 million shares, of its common stock.ETSY shares have underperformed the Zacks Retail and Wholesale sector year to date. While ETSY shares have lost 40.8%, the broader sector has returned 19.4%.Etsy, Inc. Price, Consensus and EPS Surprise  Etsy, Inc. price-consensus-eps-surprise-chart | Etsy, Inc. QuoteETSY’s Top Line Grows Y/YMarketplace revenues were $476.1 million (71.9% of the total revenues), up 3.3% from the year-ago quarter’s level. The growth was driven by payment fee revenues. A new seller setup fee and offsite ad fees also contributed to marketplace revenue expansion.ETSY acquired 5.3 million new buyers, which was a major positive. The total number of active buyers on Etsy’s marketplace stood at 91.2 million, which increased 0.4% year over year.Services revenues were $186.3 million (28.1% of the total revenues), up 6.2% on a year-over-year basis.ETSY’s Active User Base Increases Y/YEtsy’s active buyer base increased 0.7% from the prior-year quarter’s figure to 96.7 million, which missed the consensus mark of 97.2 million.The active seller base stood at 8.5 million, down 3.2% year over year. The figure missed the consensus mark of 9.7 million.ETSY witnessed solid momentum in buyer reactivation. Reactivated buyers were 6.4 million, up 5.6% year over year.Gross merchandise sales (GMS) of $2.92 billion were down 4.1% on a reported basis and 4.4% on a currency-neutral basis from the prior-year quarter. The reported figure missed the Zacks Consensus Estimate of $2.97 billion.The Etsy marketplace’s Gross Merchandise Sales (GMS) was $2.5 billion, down 6% on a reported basis from the year-ago quarter’s figure and 6.3% on a currency-neutral basis.ETSY’s Operating Expenses Rise Y/YIn the third quarter of 2024, total operating expenses were $389.95 million, up 8.6% from the prior-year quarter. As a percentage of revenues, the figure expanded to 58.9% from 56.4% in the year-ago quarter.Marketing expenses increased 22.1% year over year to $196.5 million. As a percentage of sales, marketing expenses increased 440 basis points (bps) year over year to 29.7%.Product development expenses decreased 5.9% year over year to $107.3 million. As a percentage of sales, product development expenses decreased 170 bps year over year to 16.2%.General and administrative (G&A) expenses increased 2.5% year over year to $86.2 million. As a percentage of sales, G&A expenses decreased by 20 bps to 13%.Consequently, ETSY reported an operating income of $86.8 million compared with an operating income of $88.6 million reported in the prior-year quarter.ETSY’s Balance Sheet Shows ImprovementAs of Sept. 30, 2024, cash and cash equivalents totaled $818.94 million, which increased from $759.21 million as of June 30, 2024.Short-term investments were $226.02 million, down from $240.68 million in the previous quarter.Long-term debt stood at $2.29 billion at the end of the third quarter, unchanged from the figure reported at the end of the prior quarter.ETSY’s Q4 Guidance UnimpressiveFor the fourth quarter of 2024, Etsy anticipates the take rate to be 22.3%. GMS is expected to decline in a low to mid-single-digit percentage range on a year-over-year basis.The adjusted EBITDA margin is expected to be 28-29%.ETSY’s Zacks Rank & Stocks to ConsiderEtsy currently carries a Zacks Rank #3 (Hold).CyberArk Software CYBR, DXC Technology DXC and EPAM Systems EPAM are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.CyberArk Software’s shares have appreciated 26.2% year to date. CYBR is set to report its third-quarter 2024 results on Nov. 13.DXC Technology shares have depreciated 13.1% year to date. DXC is set to report its third-quarter fiscal 2024 results on Nov. 7.EPAM Systems shares have decreased 36.5% year to date. EPAM is set to report its third-quarter 2024 results on Nov. 7.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EPAM Systems, Inc. (EPAM): Free Stock Analysis Report CyberArk Software Ltd. (CYBR): Free Stock Analysis Report Etsy, Inc. (ETSY): Free Stock Analysis Report DXC Technology Company. (DXC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks