Back to top

Image: Bigstock

Etsy (ETSY) Q1 Earnings & Revenues Beat Estimates, Rise Y/Y

Read MoreHide Full Article

Etsy, Inc. (ETSY - Free Report) delivered first-quarter 2021 earnings of $1 per share, which surpassed the Zacks Consensus Estimate by 19.05%. Further, the figure significantly jumped from 10 cents in the year-ago quarter. However, the bottom line was down 7.4% from the prior quarter.

Revenues advanced 141.5% year over yearbut declined 10.8% sequentially to $550.6 million. Notably, the figure outpaced the Zacks Consensus Estimate of $533 million.

Top-line growth was driven by accelerating Marketplace and Services revenues. Moreover, solid momentum across both buyers and sellers contributed well. Additionally, strengthening gross merchandise sales (“GMS”) were tailwinds.

Further, the pandemic-induced e-commerce boom continued to act as a major tailwind for the company.

Additionally, positive contributions from the Reverb acquisition created tailwinds.

The company remains optimistic about its investments across marketing channels. Further, advancing search algorithms, robust Etsy Ads and the integration with Etsy Payments remain positives.

Etsy, Inc. Price, Consensus and EPS Surprise

Etsy, Inc. Price, Consensus and EPS Surprise

Etsy, Inc. price-consensus-eps-surprise-chart | Etsy, Inc. Quote

Top Line in Detail

Marketplace revenues were $413.6million (75.1% of total revenues), which went up 165.3% from the year-ago quarter. This was driven by strong momentum across buyers. The company witnessed 16.3 million new and reactivated buyers on its Marketplace platform in the reported quarter. Further, strong traction across habitual and repeat buyers, which grew 205% and 114%, respectively, contributed well.

Services revenues were $137 million (24.9% of total revenues), which surged 89.9% on a year-over-year basis. Solid momentum across sellers, owing to the robust Etsy Ads program, remained a major positive.

Quarter in Detail

Etsy’s active buyer base grew 89.9% from the prior-year quarter to 90.6 million. The active seller base stood at 4.7 million, which was up 67.1% year over year.

Notably, GMS of the company was $3.1 billion, which surged 132.3% year over year.

Additionally, strong GMS from paid channels, which accounted for 21% of total GMS, expanding 500 basis points (bps) year over year, remained a major positive.

Further, the ETSY marketplace’s GMS was at $2.9 billion, 144.1% up from the prior-year quarter.

Operating Details

In first-quarter 2021, gross margin was 74%, which expanded significantly to 74% from 63.9% in the year-ago quarter.

Further, total operating expenses were $257.1 million, reflecting an increase of 113.8% year over year. However, the figure, as a percentage of revenues, contracted 600 bps to 46.7% in the year-ago quarter.

Per the company, operating margin was 27.3%, expanding significantly from 11.1% in the year-ago quarter.

Balance Sheet & Cash Flows

As of Mar 31, 2021, cash and cash equivalents totaled $1.16 billion, which decreased from $1.24 billion as of Dec 31, 2020. Short-term investments were $502.6 million, up from $425.1 million in the previous quarter.

Long-term debt stood at $1.3 billion at the end of the first quarter, up from $1.1 billion at the end of the previous quarter.

Further, the company generated $148.5 million in cash from operations inthe reported quarter.

Guidance

For second-quarter 2021, it anticipates total revenues between $493 million and $536 million, suggesting year-over-year growth of 15-25%. The Zacks Consensus Estimate for the same is pegged at $494.35 million.

Further, GMS is expected to be $2.8-$3.1 billion, indicating growth of 5-15% from the year-ago quarter’s reported figure.

Adjusted EBITDA margin is expected to be 25-28%.

Zacks Rank & Stocks to Consider

Etsy currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector worth consideration are Agilent Technologies (A - Free Report) , Pure Storage (PSTG - Free Report) and NVIDIA (NVDA - Free Report) . All the stocks carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate of Pure Storage, NVIDIA and Agilent, is pegged at 52.21%, 15.05% and 9%, respectively.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>

Published in