Etsy App on Smartphone with Logo in Background

Etsy Reports Q1 2023 Earnings – Stock Rallies After Positive Buyer Trends

Etsy released its First Quarter 2023 earnings report, and here are some noteworthy data points that sellers may find interesting about the company’s overall direction and financial health.

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“We are pleased that Etsy has once again delivered solid top and bottom line performance in the first quarter, maintaining the vast majority of our pandemic gains in the face of stiff macroeconomic headwinds,” said Josh Silverman, Etsy, Inc. Chief Executive Officer.

“We’ve kicked off an exciting pipeline of product development and marketing initiatives to drive improved customer experiences and engagement in 2023. We believe that Etsy can be more relevant, more often, to many more millions of buyers around the world.

“So we’ll be focused on welcoming new buyers to the joy of Etsy, deepening buyer curiosity and engagement, instilling trust when transacting with us, and being the preferred platform for our sellers because we help them grow effectively and efficiently.”

Fourth Quarter 2022 Financial Highlights:

  • Gross Merchandise Volume (GMV)13.1 billion, down 4.6% Year-over-Year (YoY)
  • GMV Etsy Marketplace Only: $2.7 billion, down 4.7% YOY
  • GMV United States2: $1.7 billion, down about 100 million YoY
  • GMV International2: $1.4 billion, down about 3 million YoY
  • GMV Mobile: 2.1 billion, up 1 percentage point YoY
  • Revenue: $605 million, up 10.6% YoY
  • Net Income (loss): $74.5 million, down 12% YoY
  • Active Buyers: 95.5 million, up 0.4% YoY
  • Active Buyers Etsy Only: 89.9 million, up 1% YoY
  • Active Sellers: 7.9 million, up 3.8% YoY
  • New Buyers: Added 6.7 million in Q1
  • Reactivated Buyers: 6 million in Q1, up 21% YoY
  • Habitual Buyers3: 7 million, down 10% YoY (cohort represents about 43% of GMV)
  • Repeat Buyers: 36 million
  • Active Listings: More than 100 million on Etsy
  • Employees: 2,790 globally
  • Mobile App: 8th Most downloaded shopping app in the iOS App Store
  • Business Size: 2.5x bigger than in 2019

1Etsy calls this metric GMS, or General Merchandise Volume. However, it’s the same as General Merchandise Volume (GMV), a term used more frequently by marketplaces.
2This number was calculated by Etsy disclosing that 46% of its GMV is from non-US transactions.
Habitual buyers make at least 6 purchases on Etsy, spending a minimum of $200 annually.

First Impressions: Etsy’s first quarter of 2023 is financially sound. GMV is down slightly. The company had $1.1 billion in cash and cash equivalents and short- and long-term investments at the end of the quarter.

The fantastic news is that Etsy gained buyers this quarter. This is the first time in a year that the trend has been reversed. Furthermore, Etsy also gained more sellers, again another positive trend, but it also means more competition for sellers in some categories.

Etsy Earnings Call Highlights

Now let’s take a look at a few quotes from the earnings call.

Quotes from Josh Silverman, CEO, Etsy

On Mass Produced Items: “90% of active buyers believe items on Etsy are unique, high quality and handmade. That said, mass-produced items, which make up a very small percentage of items on Etsy do continue to find their way on to the marketplace. We know it weakens trust when a buyer or a seller encounters one of these items.

“Utilizing state-of-the-art ML and AI technologies, we’ve been dialing up enforcement of our handmade and other listing policies even more in 2023 to remove items more quickly and accurately.

“We removed 1.9 million listings for violating our policies in 2022, a 16% increase from 2021.

On Testing ‘Make Offer’ Feature: “[W]e’ve recently started testing a new make an offer feature that will give vintage shop owners the option to receive offers from buyers. Since launch, thousands of sellers have opted into the initial test with more than 1 million eligible listings included so far.

On Growing Largest Category: “Etsy sellers sell billions of dollars of home furnishings. It’s our largest category. And when you ask people [to] name 3 places to shop for home furnishings, only 3% of people unprompted will name Etsy. There is a massive opportunity.”

On Branding: “[I]f you went and looked on Etsy, we had something that was more special, great value, and you just didn’t think of us.”

And in another section of the call, Silverman again mentioned: “While people love Etsy generally, they don’t know when to think of us.”

“So I think there is an enormous opportunity in simply achieving better top-of-mind consideration.”

On Search: “I am excited about generative AI in particular. And so we have shifted a few squads to focus specifically on generative AI [for search].” Explainer: ChatGPT is generative AI.

On The New App: “[W}e’ve launched a new sell on Etsy app that is going to allow us to have much more rapid releases for sellers. So we can do things like put the right data and dashboards in front of sellers. It’s a big focus of ours and a big investment to give them tools and dashboards, offer quality, make an offer, again, how do we help them give them tools so they can think about what’s the right pricing.”

On Growing The Business Globally: “I think it’s impressive the progress we’ve made in the U.K., achieving penetration rates now that are getting to be pretty similar to the U.S.

When we then turn to Germany… we do TV marketing a little earlier than we normally would. And the results we’ve seen in the past year or two in Germany are very encouraging.

“Now we’re focused on France. We also have begun investing in India, and we’re excited about India as a further field market.

“The Western European markets, the North American markets, Canada and Western Europe tend to be the ones that operate the most similar to the U.S., particularly high trust markets where the postal system works well, payments work well and people have a lot of confidence that people they’ve never met are going to ship a package and it’s going to arrive.

Quotes from Rachel Glaser, CEO, Etsy

On Product Development:“Product development spend was about 18% of revenue, up from 15% of revenue in the year ago period.

On Marketing Spend: “[C]onsolidated marketing spend increased by 11% year-over-year to $171 million.”

On New Buyers: “[A] greater percentage of our new buyers are coming from outside the U.S.”

On Promoted Listings: “We have seen growth in take rate coming a lot from Etsy ads because we keep on making the product better.”


Etsy admits it has a branding problem. We highlighted a few passages where they suggested that is something they need to work on, especially outside the U.S.

The company seems to be more focused on enforcing its selling policies. When reading comments online from sellers, it seems lately there have been more complaints about being kicked off from the platform. So, anecdotally, their statements seem to match what sellers report.

When it comes to their other properties, Reverb and Elo7 were barely mentioned. These two businesses are very niche and small by comparison to the core Etsy marketplace.

Silverman highlighted the leadership changes implemented at Depop and lauded the new team’s ability to conduct a higher number of “experiments” this year already compared to the previous year. Depop is seeing early signs of conversion improvements from these tests.

Also, Depop launched a new feature called Repop “which enables users to seamlessly relist a Depop purchased item.”

For a complete look at Etsy’s first-quarter financials, please visit the Etsy Investor Relations page. It provides additional financial context not included in this synopsis that is important for investors.

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