Etsy Q4 Earnings Surpass Expectations, Revenues Rise Y/Y

Etsy’s ETSY fourth-quarter 2024 earnings of $1.03 per share beat the Zacks Consensus Estimate by 8.42%. The bottom line increased 32.05% year over year. On the other hand, fourth-quarter 2024 revenues advanced 1.2% year over year to $852.16 million. The figure missed the Zacks Consensus Estimate by 1.11%. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Under its stock repurchase program, Etsy repurchased an aggregate of approximately $260 million, or 4.9 million shares, of its common stock in the fourth quarter of 2024.Etsy, Inc. Price, Consensus and EPS Surprise Etsy, Inc. price-consensus-eps-surprise-chart | Etsy, Inc. QuoteETSY’s Top-Line DetailsMarketplace revenues were $607.3 million (71.3% of the total revenues), down 1.4% from the year-ago quarter’s level. The decline was due to lower gross merchandise sales (GMS), which put pressure on transaction revenues. It was partially offset by higher consolidated payments revenues and revenue from the new seller onboarding fee.ETSY acquired 6.9 million new buyers, and the total number of active buyers on Etsy’s marketplace were 89.6 million, which decreased 2.6% year over year.Services revenues were $244.8 million (28.7% of the total revenues), up 8.1% on a year-over-year basis.ETSY’s Active User Base and GMS Decrease Y/YEtsy’s active buyer base decreased 1.1% from the prior-year quarter’s figure to 95.5 million, which missed the consensus mark of 96.7 million.The active seller base was pinned at 8.1 million, down 10% year over year. The figure missed the consensus mark of 9.6 million.ETSY witnessed solid momentum in buyer reactivation. Reactivated buyers were a record 9.8 million, up 1.3% year over year.GMS of $3.74 billion was down 6.8% on a reported basis and 6.9% on a currency-neutral basis from the prior-year quarter. The reported figure missed the Zacks Consensus Estimate of $3.86 billion.The Etsy marketplace’s GMS was $3.3 billion, down 8.6% year over year. This decline was due to challenging year-over-year comparisons in a shortened holiday season, category mix, a highly promotional and competitive retail environment and pressure on consumer discretionary product selling.ETSY’s Operating Expenses Rise Y/YIn the fourth quarter of 2024, total operating expenses were $479.34 million, up 1.7% from the prior-year quarter. As a percentage of revenues, the figure contracted to 56.25% from 58.9% in the year-ago quarter.Marketing expenses increased 9.2% year over year to $285.2 million. As a percentage of sales, marketing expenses increased 251 basis points (bps) year over year to 33.5%.Product development expenses decreased 5.1% year over year to $111.5 million. As a percentage of sales, product development expenses decreased 86 bps year over year to 13.08%. General and administrative (G&A) expenses decreased 10.6% year over year to $82.7 million. As a percentage of sales, G&A expenses decreased by 120 bps to 9.7%.Consequently, ETSY reported an operating income of $155.1 million compared with an operating income of $115.5 million reported in the prior-year quarter.ETSY’s Balance SheetAs of Dec. 31, 2024, cash and cash equivalents totaled $811.18 million, which decreased from $818.94 million as of Sept. 30, 2024.Short-term investments were $228.32 million, up from $226.02 million in the previous quarter.Long-term debt was $2.29 billion at the end of the fourth quarter, unchanged from the figure reported at the end of the prior quarter.ETSY’s Q1 2025 Guidance UnimpressiveFor the first quarter of 2025, Etsy anticipates the take rate to be 23%. GMS is expected to decline at a rate similar to the year-over-year performance reported for the fourth quarter of 2024. The adjusted EBITDA margin is expected to be in the range of 25-26%.Zacks Rank and Stocks to ConsiderCurrently, Etsy carries a Zacks Rank #4 (Sell).Some better-ranked stocks in the broader sector are Bath and Body Works BBWI, Beacon Roofing Supply BECN and Cars.com CARS, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Bath and Body Works, Beacon Roofing Supply and Cars.com are scheduled to report their respective fourth-quarter 2024 results on Feb. 27.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want 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 Beacon Roofing Supply, Inc. (BECN): Free Stock Analysis Report Etsy, Inc. (ETSY): Free Stock Analysis Report Cars.com Inc. (CARS): Free Stock Analysis Report Bath & Body Works, Inc. (BBWI): 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