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ETSY's Q4 Earnings Miss Estimates, Revenues Increase Y/Y
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Etsy, Inc. (ETSY - Free Report) reported fourth-quarter 2022 earnings of 77 cents per share, reflecting a year-over-year decline of 30.6%. Also, the bottom line missed the Zacks Consensus Estimate by 6.1%.
Revenues advanced 12.6% year over year to $807.2 million. The figure beat the Zacks Consensus Estimate of $753.9 million.
Top-line growth was driven by accelerating services and marketplace revenues. Moreover, strong momentum across the company’s marketplace during the holiday shopping season contributed well.
Top Line in Detail
Marketplace revenues were $600.16 million (74.3% of the total revenues), up 10.9% from the year-ago quarter’s level. This was driven by strong performance during the holiday shopping season. Also, solid momentum across buyers remained positive. ETSY acquired 9.5 million new buyers, which was a major positive.
Services revenues were $207.08 million (25.7% of the total revenues), up 17.7% on a year-over-year basis.
Etsy’s active buyer base decreased 1.3% from the prior-year quarter’s figure to 95.08 million. The active seller base stood at 7.5 million, down 0.7% year over year.
GMS of ETSY was $4.03 billion, down 4% year over year. The Etsy marketplace’s GMS was $3.7 billion, down 3.5% from the prior-year quarter’s figure.
Non-U.S. GMS for the Etsy marketplace rose 5% from the prior-year quarter’s figure on a currency-neutral basis and accounted for 45% of the total GMS.
Operating Details
In fourth-quarter 2022, the gross margin was 72%, which expanded 110 basis points (bps) year over year.
Total operating expenses were $442.12 million, reflecting growth of 20.8% on a year-over-year basis.
Consequently, the operating margin was 17.3%, which contracted 250 bps year over year.
Balance Sheet
As of Dec 31, 2022, cash and cash equivalents totaled $921.3 million, which increased from $789.9 million as of Sep 30, 2022.
Short-term investments were $250.4 million, down from $251.2 million in the previous quarter.
Long-term debt stood at $2.279 billion at the end of the fourth quarter compared with $2.278 billion at the end of the previous quarter.
Guidance
For the first quarter of 2023, Etsy anticipates total revenues between $600 million and $640 million. The Zacks Consensus Estimate for the same is pegged at $620.68 million.
GMS is expected to be $2.95-$3.15 billion.
The adjusted EBITDA margin is expected to be 26-27%.
Zacks Rank & Stocks to Consider
Currently, ETSY has a Zacks Rank #3 (Hold).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Arista Networks (ANET - Free Report) , Agilent Technologies (A - Free Report) and Salesforce (CRM - Free Report) . ANET sports a Zacks Rank #1 (Strong Buy) while A and CRM carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista is set to report its first-quarter fiscal 2023 results on Feb 28. The Zacks Consensus Estimate for Arista’s earnings is pegged at $1.33 per share, suggesting an increase of 58.33% from the prior-year period’s reported figure. The stock has gained 11.9% in the past year. The long-term earnings growth rate for ANET is currently projected at 14.17%.
Agilent Technologies is set to report its first-quarter fiscal 2023 results on Feb 28. The Zacks Consensus Estimate for Agilent’s earnings is pegged at $1.31 per share, suggesting an increase of 8.3% from the prior-year period’s reported figure. The stock has gained 10.9% in the past year. The long-term earnings growth rate for A is currently projected at 10%.
Salesforce is scheduled to release its fourth-quarter fiscal 2023 results on Mar 1. The Zacks Consensus Estimate for CRM’s earnings is pegged at $1.36 per share, suggesting an increase of 61.9% from the prior-year quarter’s reported figure. The stock has lost 8.5% in the past year. The long-term earnings growth rate for CRM is currently projected at 16.75%.
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ETSY's Q4 Earnings Miss Estimates, Revenues Increase Y/Y
Etsy, Inc. (ETSY - Free Report) reported fourth-quarter 2022 earnings of 77 cents per share, reflecting a year-over-year decline of 30.6%. Also, the bottom line missed the Zacks Consensus Estimate by 6.1%.
Revenues advanced 12.6% year over year to $807.2 million. The figure beat the Zacks Consensus Estimate of $753.9 million.
Top-line growth was driven by accelerating services and marketplace revenues. Moreover, strong momentum across the company’s marketplace during the holiday shopping season contributed well.
Top Line in Detail
Marketplace revenues were $600.16 million (74.3% of the total revenues), up 10.9% from the year-ago quarter’s level. This was driven by strong performance during the holiday shopping season. Also, solid momentum across buyers remained positive. ETSY acquired 9.5 million new buyers, which was a major positive.
Services revenues were $207.08 million (25.7% of the total revenues), up 17.7% on a year-over-year basis.
Etsy, Inc. Price, Consensus and EPS Surprise
Etsy, Inc. price-consensus-eps-surprise-chart | Etsy, Inc. Quote
Quarterly Specifics
Etsy’s active buyer base decreased 1.3% from the prior-year quarter’s figure to 95.08 million. The active seller base stood at 7.5 million, down 0.7% year over year.
GMS of ETSY was $4.03 billion, down 4% year over year. The Etsy marketplace’s GMS was $3.7 billion, down 3.5% from the prior-year quarter’s figure.
Non-U.S. GMS for the Etsy marketplace rose 5% from the prior-year quarter’s figure on a currency-neutral basis and accounted for 45% of the total GMS.
Operating Details
In fourth-quarter 2022, the gross margin was 72%, which expanded 110 basis points (bps) year over year.
Total operating expenses were $442.12 million, reflecting growth of 20.8% on a year-over-year basis.
Consequently, the operating margin was 17.3%, which contracted 250 bps year over year.
Balance Sheet
As of Dec 31, 2022, cash and cash equivalents totaled $921.3 million, which increased from $789.9 million as of Sep 30, 2022.
Short-term investments were $250.4 million, down from $251.2 million in the previous quarter.
Long-term debt stood at $2.279 billion at the end of the fourth quarter compared with $2.278 billion at the end of the previous quarter.
Guidance
For the first quarter of 2023, Etsy anticipates total revenues between $600 million and $640 million. The Zacks Consensus Estimate for the same is pegged at $620.68 million.
GMS is expected to be $2.95-$3.15 billion.
The adjusted EBITDA margin is expected to be 26-27%.
Zacks Rank & Stocks to Consider
Currently, ETSY has a Zacks Rank #3 (Hold).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Arista Networks (ANET - Free Report) , Agilent Technologies (A - Free Report) and Salesforce (CRM - Free Report) . ANET sports a Zacks Rank #1 (Strong Buy) while A and CRM carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista is set to report its first-quarter fiscal 2023 results on Feb 28. The Zacks Consensus Estimate for Arista’s earnings is pegged at $1.33 per share, suggesting an increase of 58.33% from the prior-year period’s reported figure. The stock has gained 11.9% in the past year. The long-term earnings growth rate for ANET is currently projected at 14.17%.
Agilent Technologies is set to report its first-quarter fiscal 2023 results on Feb 28. The Zacks Consensus Estimate for Agilent’s earnings is pegged at $1.31 per share, suggesting an increase of 8.3% from the prior-year period’s reported figure. The stock has gained 10.9% in the past year. The long-term earnings growth rate for A is currently projected at 10%.
Salesforce is scheduled to release its fourth-quarter fiscal 2023 results on Mar 1. The Zacks Consensus Estimate for CRM’s earnings is pegged at $1.36 per share, suggesting an increase of 61.9% from the prior-year quarter’s reported figure. The stock has lost 8.5% in the past year. The long-term earnings growth rate for CRM is currently projected at 16.75%.