Etsy shares fall as revenue misses expectations

Investing.com -- Etsy reported fourth-quarter earnings that beat analyst estimates, but revenue fell short of expectations, sending shares down 8.5% in after-hours trading.

The e-commerce company posted adjusted earnings per share of $1.03, surpassing the analyst consensus of $0.95. However, revenue came in at $852.16 million, missing the $862.75 million analysts had projected.

Etsy (NASDAQ:ETSY)'s gross merchandise sales (GMS) declined 6.8% YoY to $3.7 billion in Q4, reflecting pressure on consumer discretionary spending and a highly promotional retail environment. The company's active buyers decreased 2.6% YoY to 89.6 million.

"Despite facing significant GMS headwinds in 2024, we are proud to have delivered year-over-year revenue growth and very strong profitability, while simultaneously investing in our future," said Josh Silverman, Etsy's CEO.

The company achieved record quarterly revenue and adjusted EBITDA of $250.6 million, with an adjusted EBITDA margin of 29.4%.

For Q1 2025, Etsy expects GMS to decline at a rate similar to Q4 2024. The company projects a take rate of approximately 23% and an adjusted EBITDA margin of 25-26%.

Silverman added, "We are moving with urgency to increase buyer engagement, drive more sales, and return to GMS growth."

Etsy's newly appointed CFO, Lanny Baker, expressed confidence in the company's future, citing its differentiated offerings and financial strength. The company repurchased $260 million worth of shares in Q4.