MW Etsy misses Wall Street's revenue estimate as marketplace sales dip

By Steve Gelsi

Etsy's stock falls 7% after it comes up short of revenue expectations while beating its profit mark

Etsy Inc.'s stock was down 7.5% in premarket trading on Wednesday after the online marketplace missed the FactSet consensus estimate for revenue as gross sales on its platform dropped.

The company cited "pressure on consumer discretionary product spending, challenging year-over-year comparisons in a shortened holiday season, category mix, and a highly promotional and competitive retail environment."

Etsy $(ETSY)$ said its fourth-quarter revenue rose 1.2% to $852.2 million. While that dollar figure is a record for the Brooklyn, N.Y.-based company, it missed the analyst expectation of $861.8 million.

Etsy said it faced "significant" headwinds in gross merchandise sales, which reflects the total dollar value of items sold in all of Etsy's marketplaces.

The company's consolidated gross merchandise sales figure fell 6.8% in the fourth quarter to $3.7 billion for all its marketplaces.

Etsy marketplace gross merchandise sales $(GMS)$ dropped 8.6% to $3.3 billion.

Etsy Chief Executive Josh Silverman said Etsy is focused on enhancing the customer experience "as we work to get back to GMS growth."

Etsy's fourth-quarter profit of $1.03 a share beat the analyst estimate of 93 cents a share. The company has reduced the number of shares outstanding by 12.2 million by repurchasing stock.

The company said its revenue growth was partly attributed to its services business, which benefited from improvement in its bidding algorithms on behalf of sellers.

Fourth-quarter net income increased 56% to $129.9 million, against the year-ago quarter, which included $27 million of restructuring and other exit costs.

Consolidated net income margin increased 530 basis points, to 15.2%.

Ahead of Wednesday's trading, Etsy's stock was up 8.3% in 2025, while the S&P 500 SPX has risen 4.2%.

-Steve Gelsi

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February 19, 2025 07:39 ET (12:39 GMT)

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