Tag: etsy

Etsy Closing Offices As Employees Keep Working Remotely

Etsy has announced it is closing its Hudson, NY and San Francisco, CA offices in response to employees continuing to work remotely.

Companies of all sizes have been trying to adapt to the new normal brought about by the pandemic. Some have tried to return to the old way of doing things, requiring workers to be in the office, while others have embraced remote and hybrid workflows.

Etsay appears to be firmly in the latter camp, going so far as to close some of its offices as a result of remote work.

“Supported by Etsy’s robust hybrid framework, many who are currently remote have told us they do not plan to return to an office in the near future,” writes Kim Seymour, the company’s chief HR officer. “As a result, we are closing our offices in Hudson, NY and San Francisco, CA, where employee office utilization has been extremely low. One of our guiding principles is minimizing waste, and operating offices that go predominately unused is in direct opposition to that principle – wasting energy, capital and internal programming efforts. As part of our new Hub Strategy model, Etsy employees based out of those offices will be transitioning to the fully remote work mode. We’ll continue to ensure they are supported, able to work productively, and can effectively collaborate with colleagues, with our offices in Brooklyn HQ as their hub office.”

Read more: Marc Andreessen: Remote Work Is ‘Potentially an Earthquake…Turning Point for Society’

Beyond this specific move, Etsy’s flexible work policies have significantly benefited the company and reduced employee churn, even in the midst of the “Great Resignation.”

“More than 80% view our policies on how and where we work favorably,” Seymour adds. “Beyond what our teams are saying, our flexible model has enabled Etsy to keep recruiting and retain talent across industries as we expand globally. We’ve grown our Etsy workforce by 50% since before the pandemic, and our attrition levels have consistently remained well below both industry benchmarks and our own expectations, even as a “Great Resignation” has dominated the market.”

Etsy clearly has figured out what works for the company and its employees, settling on a new normal that all parties are benefiting from.

July 27, 2022
Internet Companies Launch Initiative In Support of Section 230

Some of the most prominent internet companies have formed the Internet Works coalition to promote Section 230, a key internet law.

Section 230 of the Communications Decency Act gives companies immunity for content users upload or post on their sites. As a result, companies like Facebook, Twitter and others cannot be held legally liable for an offensive post, picture or the like.

In recent years Section 230 has come under fire, culminating in President Trump threatening to veto a defense spending bill unless Section 230 is revoked. While President-elect Biden has not weighed in on Section 230 directly, his former top tech advisor has said its time for changes to the law, throwing in question the law’s status even with a change of administration.

Internet Works, however, is working to help educate lawmakers about the role of the law. Automattic (maker of WordPress), Cloudflare, Dropbox, eBay, Etsy, Glassdoor, GoDaddy, Medium, Nextdoor, Patreon, Pinterest, Reddit, Snap Inc., Tripadvisor, Vimeo and the Wikimedia Foundation are all members of the coalition.

“These well-known internet companies and nonprofits launched Internet Works to elevate the voice of stakeholders across the digital economy and work with policymakers to preserve the benefits of Section 230, the foundational internet law that enables the United States to lead the world in innovation and robust job growth in the technology sector,” said Josh Ackil, Spokesperson for Internet Works. “Internet Works members rely on CDA 230 to make their platforms safe for users and support free expression. This coalition brings new voices and diverse perspectives to Washington’s current Section 230 debate, which too often focuses on the largest internet platforms.”

The wide range of companies making up the coalition illustrates the far-reaching impact of Section 230. While many think of social media platforms as the primary beneficiaries of the law, companies like Dropbox also benefit. As a cloud storage provider, should Dropbox be liable for whatever a customer chooses to use that storage for? If Dropbox should be liable, then what measures should they be expected to take to verify the content they host? What privacy protections will customers be able to expect, or not expect, as a result of those measures?

Whatever happens with Section 230, it’s clear there are significant challenges to addressing the problems of a modern internet.

December 15, 2020
Etsy CEO: Anti-Competitive Act By Amazon To Consolidate Market Power

“Amazon then has turned around and supported a bill in California to say that every other online marketplace that’s not acting like a retailer (as Amazon is) should be held strictly liable,” says Etsy CEO Josh Silverman. “So Craigslist or eBay or Etsy should have liability. This is going to have tremendous consequences for the 3 million sellers on Etsy and for all sorts of small businesses all around the country should Amazon prevail in this fight. It’s really an anti-competitive act from amazon to consolidate their market power.”

Josh Silverman, CEO of Etsy, discusses how Amazon is using its financial power to cynically support legislation it was previously against for the sole purpose of crushing smaller competitors such as Etsy:

Wolf In Sheep’s Clothing To Protect Amazon’s Market Power

I think this is an important issue and it’s important for everyone in America. This is a wolf in sheep’s clothing designed to protect Amazon’s market power and extend Amazon’s market power. It’s dressed up to look like consumer protection.

Here’s what’s going on. Consumers, of course, need to be protected if something goes wrong with a purchase. There’s a long history of law that says if you buy something from a retailer and something goes wrong that retailer is strictly liable. It also says if you buy something on a marketplace the vendor on the marketplace is liable but the marketplace itself is not. Think if you buy something from a flea market, the landlord who owns the parking lot is not liable, it’s the person you bought it from at the flea market.

Tremendous Consequences For Etsy Should Amazon Prevail

So the question, and there’s been a gap in recent law, what happens when a marketplace starts to look and act like a retailer? We don’t need California to come and pass a law on that because the California judiciary just settled that issue last week. They said Amazon looks like a duck and smells like a duck so it acts like a retailer. It exerts control, it picks the inventory, it stores the inventory in its warehouses, it pick-packs and ships the inventory, it puts it in an Amazon box and it delivers the box to your door in an Amazon van. It said Amazon meets the standard of acting like a retailer and therefore it should be liable like a retailer.

Amazon then has turned around and supported the bill in California to say, well then every other online marketplace that’s not acting like a retailer should be held strictly liable. So Craigslist or eBay or Etsy should have liability. This is going to have tremendous consequences for the 3 million sellers on Etsy and for all sorts of small businesses all around the country should Amazon prevail in this fight.

Anti-Competitive Act By Amazon To Consolidate Market Power

Amazon has previously been fighting these kinds of bills for years. It’s so cynical. They lost this court case because the court found that they act like a retailer. So they’re now strictly liable in the cases where they act like a retailer. The court didn’t find that they do it every time. The court set a standard for what are the tripping points. They gave guidance for other courts on when is a marketplace actually acting so much like a retailer that they should be held strictly liable. Amazon would trip that wire most of the time.

Amazon then flipped and said well this is an inconvenience for us but it would be a crushing burden for small businesses, for our competitors, for people like Craigslist or Etsy. They’ve now backed a law saying since we have to do this because we act like a retailer we want all online marketplaces to also be held liable even if they don’t act like a retailer. The reason is that this is so complex that a smaller place, a marketplace like Etsy, which never touches the merchandise, which doesn’t fulfill, which doesn’t pick pack and ship, simply can’t comply. It’s really an anti-competitive act from amazon to consolidate their market power.

Etsy CEO Josh Silverman: Anti-Competitive Act By Amazon To Consolidate Market Power

August 27, 2020
There’s Been a Lot of Advances In Machine Learning, Says Etsy CEO

“There’s been a lot of advances in machine learning that take things that would have been literally impossible ten years ago and made those things much more possible today,” says Etsy CEO Josh Silverman. “With 62 million products for sale, picking for any given buyer the 20 or 30 that should be on page one of search results is a pretty interesting and pretty challenging task. The key is understanding what an item is with relatively little data and then being able to determine for each individual person how to personalize search results.”

Josh Silverman, CEO of Etsy, discusses how Etsy has increased growth by standing out in a world of sameness and by employing machine learning technology to personalize the Etsy experience for their customers. Silverman talks about his strategy for success in an interview with Fortune:

We Started Doing Much Fewer Things Much Better

Etsy has never been more relevant. In a world where so many of our products are being commoditized and we’re surrounded by a sea of sameness, Etsy stands for something really different. I think it’s really important that we stand out in the world and I’m proud of what the team has done to achieve that. The definition of success was really clear. I think from day one it’s about growing the size of the pie for everyone. The actual tactics that it was going to take to do that we’ve learned together as a team over time.

When I arrived, there were maybe eight or ten different metrics of success that we all held relatively equally. I said there’s one metric that matters much more than every other, which is what we call gross merchandise sales. In other words, the total sales of our sellers. When we stopped saying what’s a good idea, what moves any one of these 10 metrics and started saying, what are the fewest things we need to do to really accelerate gross merchandise sales, we came to a very different answer. We started doing much fewer things much better. That’s really been the key to our success.

There’s Been a Lot of Advances In Machine Learning

Change is hard. When running a marketplace we have access to a lot of data and insights that each individual seller won’t necessarily have. Our job is to really look after the good of the whole and be willing to make some decisions that sometimes, in the moment, may not feel obvious to every seller but really do lift all boats and make our sellers as a whole much better off. We’ve really focused at a high level on doing two things really well. One, make it much easier for people to find great products on Etsy. And two, once they’ve found those products to actually buy them.

With 62 million products for sale, picking for any given buyer the 20 or 30 that should be on page one of search results is a pretty interesting and pretty challenging task. There’s been a lot of advances in machine learning that take things that would have been literally impossible ten years ago and made those things much more possible today. The key is understanding what an item is with relatively little data and then being able to determine for each individual person how to personalize search results. We’ve made leaps and bounds in the science of search and machine learning. That’s more relevant at Etsy than almost anywhere else.

The mission of Etsy is incredible. As the nature of work changes creativity can’t be automated. The role we play for creators and makers being able to harness their creative passions and power and turn that into a way to earn a living for their families is a mission that I think is ever more important in this fast-changing economy.

There’s Been a Lot of Advances In Machine Learning, Says Etsy CEO Josh Silverman

March 20, 2020
DTC Brands Doing Incredible Numbers on Shopify, Says COO

Direct to consumer brands are doing incredible numbers on Shopify, says Shopify COO Harley Finkelstein. He says that Kylie Jenner has generated almost a billion dollars in sales on the platform and many other influencers such as Kanye West, Drake, and most recently Tom Brady are also doing very well.

“Even if you go beyond just Kylie, you look at companies like Bombas and Allbirds and Tommy John and Fashion Nova, these are brands that didn’t exist five or ten years ago and they’re absolutely doing incredible numbers on Shopify with no slowing down in mind,” says Finklestein. “Shopify was built to help anyone that has an idea start a great business and sell to a global audience.”

Harley Finkelstein, COO of Shopify, talks about the incredible numbers DTC brands are doing on Shopify, the huge success of Shopify Capital, and their quick acceptance of cannabis stores in Canada and potentially the rest of the world, in an interview with Jim Cramer on CNBC:

DTC Brands Doing Incredible Numbers on Shopify

We’re really happy with how we ended the year and certainly, the quarter was great and we’re really excited about our future. We’ve been at this now for almost 14 years. We’ve grown to 820,000 merchants up from 600,000 merchants a year ago. We have a big top of funnel with brand new entrepreneurs getting started on Shopify for the very first time. We also have some very large brands like the big CPGs and some big direct to consumer (DTC) companies all using Shopify to scale their businesses. We’ve got a really great business model and we’re having a lot of fun.

It’s amazing. I think the Kylie story ($1 billion in sales) was surprising to a lot of people, not for us because we see so many stories like that all the time. Whether it’s Kanye West launching his Yeezy store on Shopify or Drake’s store or Tom Brady’s new store, we see all of these major brands and huge influencers using Shopify to create authentic products and sell it to the audience. I always sort of think back to if DTC and direct-to-consumer were around when Michael Jordan was creating the Jordan brand with Nike I think Nike would be a supplier and Michael Jordan would be the brand. He would own the entirety of his business as opposed to getting a licensing fee.

We’re really excited about this. But even if you go beyond just Kylie, you look at companies like Bombas and Allbirds and Tommy John and Fashion Nova, these are brands that didn’t exist five or ten years ago and they’re absolutely doing incredible numbers on Shopify with no slowing down in mind. Shopify was built to help anyone that has an idea start a great business and sell to a global audience. We really do bend the learning curve to make it really easy to get started.

Shopify Helping Democratize the Entire Business Process

The ones that succeed, not all of them do, but the ones that do succeed they grow really large with us and over time we want to provide them with more services and more solutions. For example, we launched Shopify Payments a couple of years ago. We went to the payments companies and negotiated rates on their behalf. We launched Shopify Shipping and went to the shipping company and negotiated shipping costs on their behalf. We always are trying to find economies of scale to help democratize the entire business process for these small businesses.

More recently we realized that a lot of these small businesses also need capital. Because we have so much information on them we’re able to make really quick and very effective underwriting decisions so we were able to go and offer them capital cash advances. We’ve given out hundreds of millions of dollars of cash advances to a lot of these small businesses who if it wasn’t for Shopify would not be able to get this money on their own.

Entrepreneurs Want to Own Their Audience

Etsy fundamentally is a marketplace. Etsy is a place where someone who makes a product can go to find an audience. But our feeling is that you know for an entrepreneur they don’t always want to rent the audience. They want to own the audience. They want to have a direct relationship with their customers. They want to own the entire to profit margin. They want to be able to sell and have long-term relations with the people that are buying their products.

So companies like Etsy do a really good job of curating a bunch of products and renting those customers to those makers. We think the marketplaces are really great but we think ultimately makers and entrepreneurs and merchants want to have a direct relationship with the people buying their products. One of the things that is not well known about Shopify but one way to think about what we do is really this retail operating system. Merchants can start a store with us very easily and they can build a beautiful online store but they can also cross-sell to different marketplaces like eBay or Amazon.

The idea is that it feeds all feeds back in one centralized back office which is Shopify. That’s where they can run the entirety of their business. Really the idea is let’s become the most important piece of software they use on a daily basis. The first thing they open every morning, the last thing they close every night. So obviously marketplace will play a role there but ultimately merchants want to find customers wherever those customers exist and more and more they want to sell direct to those customers.

Shopify Facilitating Cannabis Sales in Canada

The reason we started with Canada was there was clarity in Canada. The Canadian government, the legislature, they were very clear with how they were going to roll out the commercialization and the legalization of cannabis sales on the consumer side. We felt it was really important for us to act quickly and effectively to not only win as much of the Canadian market as we possibly could but also to show the rest of the world as they begin to think about cannabis sales that we are the first phone call that they should be making.

Whether it’s the province of Ontario or British Columbia or most of the largest licensed producers like Canopy in Canada, Shopify is what’s powering those retail sales. We think that we can do a great job helping other countries and other regions do the same thing.

February 4, 2020
We Enable Small Sellers To Compete With the Big Guys, Says Etsy CEO

“We allow small sellers to be able to compete head-to-head with the big guys,” says Etsy CEO Josh Silverman. “We do that by giving them a super simple and easy way to build a business online and market themselves while we do all the business work for them. They can just focus on making great products and serving their customers. We really are (trying to equalize and level the playing field for small sellers). Most importantly, we bring them customers and we bring them buyers. We’re not just a way to put a shop on the web. We’re a way to actually have people come and buy. That’s really powerful.”

Josh Silverman, CEO of Etsy, discusses how they are focused on driving customers and buyers to their base of 2.3 million sellers on the Etsy platform, in an interview with Jim Cramer of CNBC:

We Enable Small Sellers To Compete With the Big Guys

Free shipping is now an expectation in the market. Too often buyers on Etsy have said that they think shipping prices are too high. What we announced in the second quarter is that we’re going to make free shipping the standard that people expect when they come to Etsy. So we announced a number of initiatives to make that easy for sellers to adopt. Obviously, to help sellers, the most important thing is that we can do is drive traffic to Etsy. But our sellers are hungry to invest in their own success. So we also announced just the other day the launch of Etsy Ads, which is a new platform that allows our sellers to invest to grow and buy traffic off of Etsy and bring it on to their Etsy shop.

We allow small sellers to be able to compete head-to-head with the big guys. We do that by giving them a super simple and easy way to build a business online and market themselves while we do all the business work for them. They can just focus on making great products and serving their customers. We really are (trying to equalize and level the playing field for small sellers). We give them that kind of data. We also make it really easy for them to understand by giving them tools that make it super easy for them to understand. Most importantly, we bring them customers and we bring them buyers. We’re not just a way to put a shop on the web. We’re a way to actually have people come and buy. That’s really powerful.

To get a two-sided marketplace where you’ve got 43 million buyers and 2.3 million sellers at scale, that’s incredibly hard to do and incredibly hard to replicate. Once you’ve got it it’s durable. Just look at our growth rate. We’re incredibly excited about our opportunity here.

We Enable Small Sellers To Compete With the Big Guys, Says Etsy CEO Josh Silverman

August 7, 2019
Etsy CEO: Machine Learning is Opening Up a Whole New Opportunity

Etsy CEO Josh Silverman says that “machine learning is opening up a whole new opportunity” for the company to organize 50 million items into a discovery platform that makes buying an enjoyable experience and also is profitable for sellers.

Josh Silverman, CEO of Etsy, recently talked about their much-improved business and why it is working so well with Jim Cramer on CNBC:

Our Mission is Keeping Commerce Human

Our mission is keeping commerce human. It’s really about in a world where automation is changing the nature of work and we’re all buying more and more commoditized things from the same few fulfillment centers. Allowing someone to harness their creative energy and turn that creativity into a business and then connect with someone in the other part of the country or in another part of the world, that’s really special. We think there’s an ever-increasing need for that in this world.

It’s about value. We’ve been really focused on delivering more value for our makers. Etsy really is a platform that brings buyers to sellers and that’s very valuable. We raised our commission from 3.5 to 5 percent commission which was I think is fair value for our sellers, particularly because we’re reinvesting 80 percent of that into the growth of the platform.

Free shipping is pretty much table stakes today. Yet only about 20 percent of items have free shipping. About half of all the items on Etsy buyers say have shipping prices that are too high and yet we grew GMS at 20 percent last quarter.

Machine Learning is Opening Up a Whole New Opportunity

Machine learning is opening up a whole new opportunity for us to take 50 million items from two million makers and make sense of that for people. We have 37 million active buyers now and many of them come just for discovery, just to see what they can find, and that is exactly the right thing for someone out there. Our job is to create that love connection. Etsy over the past 14 years, with a large team effort, has I think done a great job.

One thing I want to emphasize is the quality and the craftsmanship with so many of the products on Etsy. That’s something that has been such a delight for me. People like Kringle Workshops that make these incredible products. What we have been doing a better job and need to continue to do a better job of really surfacing the beautiful artisanally crafted products that are available at a really fair price. You’re not having to pay for warehousing, you’re not having to pay for all the other things that mass-produce things have to pay for, you’re buying directly from the person who made it. So it can be both beautiful, handcrafted, and well priced.

There are 2 million sellers, 87 percent of them are women, over 90 percent are working from home or are businesses of one, who can create a global business from their garage or their living room. Etsy does provide a real sense of community for them and that’s really powerful.

Amazon May Open New HQ in Queens Near Etsy

We feel great about our employee value proposition and come what may. Here’s what we have going for us. We think we’ve got the best team, certainly in tech companies on the eastern seaboard. We think ours is the best and we continue to attract great talent. The reason is, first and foremost, our mission is really a meaningful important mission and that matters. Great people want to work in a place with a great mission.

Second, our technology challenges are interesting. For example, search and using machine learning to make sense of 50 million items that don’t map to a catalog. Third, our culture is really special. We have been a company that’s authentically cared about diversity from the beginning. Over 50 percent of our executive staff are women, we have a balanced board, 50 percent male and female, and 32 percent of our engineers are female, which is twice the industry average. People who care about diversity and inclusion really want to come to work at Etsy. All of that is going for us and we’re happy to compete with whoever we need to.

Earnings Call Comments by Etsy CEO:

Active Buyers Grew 17 Percent

Etsy’s growth accelerated again in the third quarter to nearly 21% on a constant-currency basis. Revenue growth exceeded 41%, fueled by the launch of our new pricing structure, and our adjusted EBITDA margins grew to nearly 23%, while we also increased our investments in the business.

Active buyers grew 17% to 37 million worldwide. This is the fourth consecutive quarter that GMS has grown faster than active buyers, evidence that we are seeing increased buyer activity on the platform, which is a key proxy for improvement in frequency. We grew the number of active sellers by 8% and GMS per active seller is also increasing.

Two principal levers contributed to our progress this past quarter. The first is our continued product investment, focused on improving the shopping experience on Etsy. By making it easier to find and buy the great products available for sale on Etsy, we’re doing a better job converting visits into purchases. The second lever was our new pricing structure, which enabled us to ramp up investments in marketing, shipping improvements and customer support.

Successful Cloud Migration

We achieved a significant milestone in our cloud migration this quarter, successfully migrating our marketplace, Etsy.com, and our mobile applications to the Google Cloud with minimal disruption to buyers and sellers. This increases our confidence that the migration will be complete by the end of 2019.

Once fully migrated, we expect to dramatically increase the velocity of experiments and product development to iterate faster and leverage more complex search and machine learning models with the goal of rapidly innovating, improving search and ultimately driving GMS growth.

In fact, we’re beginning to see some of those benefits today based on the systems we’ve already migrated. I’d like to thank our engineering team for their incredible work to get this – get us to this point.

November 8, 2018
Etsy Fails to Hit Quarterly Revenue Target, CEO Gets the Boot

E-commerce site Etsy had to cut its workforce by 8% and fired its CEO, Chad Dickerson, after failing to hit its first quarter revenue targets.

The statement on the first quarter earnings reported revenues of $96.9 million, just below the projected earnings of $98.4 million. A slowdown in consumer spending in February apparently dragged down the numbers, resulting in zero earnings per share for the first three months of 2017, which was below the 1% forecast.

Etsy tanks after announcing a new CEO, flat earnings, and job cuts https://t.co/XnClIwewfF pic.twitter.com/r37Awwe1U3

— BI Finance (@clusterstock) May 3, 2017

In the same release, Dickerson expressed optimism for the strong business model of Etsy, which he believes will pull it through the challenging times and “drive long-term growth for all stakeholders.”

Dickerson, however, won’t get the opportunity to steer the company in the right direction as he was replaced by Josh Silverman, a former executive at eBay. John Allspaw, the chief technology officer, also left the company while 80 workers have been laid off in the company’s effort to streamline its personnel.

Silverman won’t be coming in blind, as he’s familiar with what ails the company, being a member of the Board of Directors since November 2016. Dickerson will also remain as an adviser until the end of this month.

Fred Wilson, who was named as the new chairperson of the Board of Directors, said appointing Silverman as the new CEO will make for an easy transition with the exit of Dickerson.

The company did not provide details on why spending in February was down. The press should also not expect a financial forecast anytime soon due to the change in management. Etsy reported losses of $421,000 in the first three months of this year against a $1.2 million earning for the same period last year.

Maxim Group analyst, Tom Forte, said Etsy’s decision to be cautious is “creating a level of uncertainty that the market’s uncomfortable with.” The CEO’s exit dragged down shares by 17% at closing.

Another issue pointed out is the poor web infrastructure of Etsy, which made it difficult for consumers to maximize its local search engine. This concern was aired by black-and-white art, which claims to own 2% of the e-commerce site.

The company said that as early as February, they have already instituted some measures to streamline their cost structure, while also looking for other ways to boost efficiency. “As a result of this process, we have identified savings that will be realized through a combination of headcount reductions and a reduction in internal program expenses,” the statement explained.

May 4, 2017
Etsy Announces Site-Building Tool ‘Pattern,’ Redesigned Landing Pages For Shops

Etsy made two major announcements on Tuesday aimed at improving the selling experience. These are a new paid site-building tool called Pattern and a new redesigned landing page for Etsy shops called Shop Home.

Pattern appears to be Etsy’s answer to ecommerce shop platforms like Shopify and site-building services like Squarespace. The main differentiator is that it’s all powered by Etsy and is integrated with the Etsy features sellers are familiar with.

Pattern shops leverage the seller’s existing Etsy shop and the work they’ve already put into it on their own custom website on their own domain. It includes all shop listings and content, syncs orders and inventory between sites, and provides analytics integrated with Etsy shop stats. It also uses the same checkout and shipping tools sellers are already using.

“The setup is quick and easy—for most shops, it will take only a few minutes—and offers five thoughtfully designed themes that sellers can choose from to personalize their sites,” explains Etsy’s Mike Grishaver. “Sellers can choose from themes that highlight their listings or ones that more prominently feature their brand assets, and they can customize each with shop logos and brand colors. Sellers with Direct Checkout enabled can try Pattern for free with a 30-day trial, after which Pattern is only $15/month.”

“We believe Pattern will deliver a special shopping experience as well—a high-quality, modern and professional-looking ecommerce site with branding unique to that shop,” he says. “Pattern sites feature responsive webpages so they look great at any size, on any device. And, with co-branded Etsy checkout, buyers will be reassured that their purchase is secure and trustworthy.”

The Shop Home landing pages are more customizable than the previous version. They’re mobile-friendly and give more sellers more creative control according to the company. They allow sellers to highlight their brands within the Etsy Marketplace.

The design includes a prominent cover photo and the ability to rearrange listings in the desired order. Here’s the before and after:

This is rolling out to all sellers over the coming week.

Images via Etsy

April 5, 2016

Etsy Gives Shareholders Something They Like

Investors weren’t thrilled with Etsy’s Q3 report when the company posted a net loss of $6.9 million ( 6 cents per share) and revenue of $65.7 million. On Tuesday, the company posted its Q4 and full-year 2015 financials with a much better reaction as shares quickly went upward.

Etsy posted a Q4 adjusted loss of $0.04 per share and revenue of $87.8 million, which was higher than Wall Street projections.

“We are proud of our progress in 2015. We hit many important milestones that are the building blocks for long-term, sustainable growth,” said CEO Chad Dickerson. “We executed against our strategic priorities, particularly in mobile, where we began to narrow the gap between mobile visits and mobile GMS. We also enhanced our existing seller services and continued to bring new constituents into the Etsy Economy. All of this activity allowed Etsy to generate $2.4 billion in GMS in 2015 and support approximately 1.6 million active sellers and more than 24.0 million active buyers. In 2016, we remain committed to reimagining commerce and are focused on launching more products and services that will allow us to build long-term value for our community.”

The company provided three-year financial guidance.

CFO Kristina Salen said, “We believe Etsy has significant opportunity ahead and we remain committed to delivering long-term, sustainable growth to all our stakeholders. One of our key values at Etsy is open and transparent communication. In that spirit, we are providing this additional long-term guidance to better demonstrate how we believe our strategic initiatives will translate to our financial results over the next three years.”

Find the full release below:

BROOKLYN, N.Y., Feb. 23, 2016 /PRNewswire/ — Etsy, Inc. (NASDAQ: ETSY), a marketplace where people around the world connect, both online and offline, to make, sell and buy unique goods, today announced financial results for its fourth quarter and full year ended December 31, 2015.

“We are proud of our progress in 2015. We hit many important milestones that are the building blocks for long-term, sustainable growth,” said Chad Dickerson, Etsy, Inc. CEO and Chairman. “We executed against our strategic priorities, particularly in mobile, where we began to narrow the gap between mobile visits and mobile GMS. We also enhanced our existing seller services and continued to bring new constituents into the Etsy Economy. All of this activity allowed Etsy to generate $2.4 billion in GMS in 2015 and support approximately 1.6 million active sellers and more than 24.0 million active buyers. In 2016, we remain committed to reimagining commerce and are focused on launching more products and services that will allow us to build long-term value for our community.”

Fourth Quarter 2015 Financial Summary

(in thousands)

Three Months Ended
December 31, % Growth Y/Y Year Ended
December 31, % Growth Y/Y

2014 2015 2014 2015

GMS $ 611,474 $ 741,488 21.3 % $ 1,931,981 $ 2,388,387 23.6 %

Revenue $ 64,912 $ 87,895 35.4 % $ 195,591 $ 273,499 39.8 %

Marketplace revenue $ 33,311 $ 39,796 19.5 % $ 108,732 $ 132,648 22.0 %

Seller Services revenue $ 30,690 $ 47,230 53.9 % $ 82,502 $ 136,608 65.6 %

Adjusted EBITDA $ 9,298 $ 14,049 51.1 % $ 23,081 $ 31,007 34.3 %

Active sellers 1,353 1,563 15.5 % 1,353 1,563 15.5 %

Active buyers 19,810 24,046 21.4 % 19,810 24,046 21.4 %

Percent mobile visits 56 % 61 % 500 bps 54 % 60 % 600 bps

Percent mobile GMS 38 % 44 % 600 bps 37 % 43 % 600 bps

Percent international GMS 30.6 % 29.2 % (140) bps 30.9 % 29.8 % (110) bps

For information about how we define these metrics, see our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed with the SEC on November 5, 2015.

Fourth Quarter 2015 Operational Highlights

GMS was $741.5 million, up 21.3% compared with the fourth quarter of 2014. Growth in GMS was driven by 15.5% year-over-year growth in active sellers and 21.4% year-over-year growth in active buyers. Continuing the trend we’ve seen for multiple quarters, mobile visits once again grew faster than desktop visits and, for the second consecutive quarter, we narrowed the gap between mobile visits and mobile GMS. Percent mobile visits was approximately 61% compared with approximately 56% in the fourth quarter of 2014 and percent mobile GMS was approximately 44% compared with approximately 38% in the fourth quarter of 2014. Throughout 2015, we continued to enhance our buyer mobile apps in many ways such as adding new deeplinking functionality, integrating social sign-up and sign-in, and expanding our mobile payment and digital wallet options with Apple Pay® and Google Wallet™. We believe this work strengthened our mobile footprint and contributed to our strong year-over-year GMS growth on our buyer mobile app, which further narrowed the gap between mobile visits and mobile GMS during the fourth quarter.

We continue to believe that we can grow international GMS, over time, to represent 50% of our total GMS and that the impact of currency exchange rates contributed to the year-over-year decline in percent international GMS, which was 29.2% in the fourth quarter of 2015. Percent international GMS was 29.3% in the third quarter of this year.

We believe that our GMS growth and percent international GMS are impacted by currency exchange rates in two ways. First, approximately 11% of our GMS comes from goods that are not listed in U.S. dollars and, as a result, is subject to the impact of currency exchange fluctuations. The percentage of GMS from goods that are not listed in U.S. dollars is slightly higher than what we reported in the third quarter of 2015. Excluding this direct impact, on a currency-neutral basis, GMS growth in the fourth quarter of 2015 would have been 22.7%, or approximately 1.4 percentage points higher than the as-reported 21.3% growth.

Second, we believe weaker local currencies in key international markets continued to dampen the demand for U.S. dollar-denominated goods during the fourth quarter of 2015. For example, during the fourth quarter of 2015, GMS from international buyers purchasing from U.S. sellers declined approximately 13% year-over-year, compared with an approximately 13% and 6% year-over-year decline in the third and second quarters of 2015, approximately flat year-over-year performance in the first quarter of 2015, and approximately 23% and 44% year-over-year growth in the fourth and third quarters of 2014 respectively. In contrast, excluding our French marketplace ALM, GMS from international buyers making purchases from sellers in their own country grew approximately 49% year-over-year during the fourth quarter of 2015.

Taken together, we estimate that the impact of currency translation on goods not listed in U.S. dollars and the impact of currency exchange rates on international buyer behavior reduced our year-over-year GMS growth rate by approximately two percentage points in the fourth quarter.

Fourth Quarter 2015 Financial Highlights

Total revenue was $87.9 million, up 35.4% year-over-year, driven by growth in both Marketplace and Seller Services revenue. Marketplace revenue grew 19.5%, primarily due to growth in transaction fee revenue and, to a lesser extent, growth in listing fee revenue. Seller Services revenue grew 53.9% year-over-year, due to growth in revenue from both Direct Checkout, which benefited from the integration of PayPal early in the fourth quarter, and Promoted Listings, which grew at a slightly lower rate than Direct Checkout. Seller Services revenue also benefited from growth in revenue from Shipping Labels, which continued to grow faster than Marketplace revenue in the fourth quarter.

Gross profit for the fourth quarter was $57.7 million, up 36.9% year-over-year, and gross margin was 65.6%, up 70 bps compared with 64.9% in the fourth quarter of 2014. Similar to the first, second and third quarters of 2015, gross profit grew faster than revenue in the fourth quarter because of the leverage we achieved in employee-related and hosting and bandwidth-related costs as well as the continued strong growth of Promoted Listings, a higher-margin revenue stream.

Total operating expenses were $49.3 million in the fourth quarter, up 17.5% year-over-year. Total operating expenses as a percent of revenue declined to 56.1% in the fourth quarter of 2015 compared with 64.6% in the fourth quarter of 2014, as revenue growth continued to outpace operating expense growth.

The overall increase in operating expenses was primarily driven by the planned increase in reported marketing expenses, which grew 53.8% year-over-year mostly due to increased spending on digital marketing, which is currently focused on product listing ads. The year-over-year growth rate in fourth quarter marketing expenses decelerated relative to the growth rate of marketing expenses during the fourth quarter of 2014, which was 95.5%.

Product development expenses grew 15.3% year-over-year, primarily due to higher employee-related expenses. G&A expenses decreased 11.5% year-over-year. The year-over-year reduction in G&A expenses reflects the favorable impact of a mark-to-market adjustment related to ALM stock-based compensation and a reduction in bad debt expense.

Non-GAAP Adjusted EBITDA for the fourth quarter was $14.0 million and grew 51.1% year-over-year. Adjusted EBITDA margin was 16.0%, up 170 bps year-over-year.

Net loss for the fourth quarter of 2015 was $4.2 million, compared with a $5.4 million net loss in the fourth quarter of 2014. Etsy’s net loss in the fourth quarter of 2015 was impacted by a foreign exchange loss and our income tax provision. We recorded $6.0 million of foreign exchange loss in the fourth quarter of 2015 largely made up of a non-cash currency loss related to the revised global corporate structure that we implemented on January 1, 2015. We also recorded a $6.3 million tax provision in the fourth quarter of 2015 primarily driven by non-cash charges related to our revised global corporate structure.

Net cash provided by operating activities was $10.2 million in the fourth quarter of 2015 compared with $0.1 million in the fourth quarter of 2014. The increase in net cash provided by operating activities for the quarter was mainly due to the timing of payments to certain vendors.

Cash, marketable securities and short-term investments were $292.9 million as of December 31, 2015.

3-Year Financial Guidance

“We believe Etsy has significant opportunity ahead and we remain committed to delivering long-term, sustainable growth to all our stakeholders. One of our key values at Etsy is open and transparent communication. In that spirit, we are providing this additional long-term guidance to better demonstrate how we believe our strategic initiatives will translate to our financial results over the next three years,” said Kristina Salen, Etsy, Inc. CFO.

Over the next three years we believe we can deliver solid revenue growth and achieve leverage in our cost structure to expand our margins.

2016-2018 CAGR Range 2016 Guidance

GMS Growth 13-17% Mid-point of range

Revenue Growth 20-25% High end of the range

Gross Margin

(by 2018)
Mid 60s (%) 64-65%

Adjusted EBITDA Margin

(by 2018)
High teens (%) 10-11%

We expect to achieve a three-year revenue CAGR in the 20-25% range and a three-year GMS CAGR in the 13-17% range. In 2016, we expect revenue growth to be at the high end of our three-year range and GMS growth to be near the mid-point of our three-year range. We anticipate that the key factors impacting revenue and GMS growth over the next three years include:

Further narrowing of the gap between mobile visits and mobile GMS

Stable percent international GMS, assuming that currency remains stable compared to average levels in December 2015

Continued revenue growth in our existing seller services, driven by both adoption and product enhancements

Modest contributions from new product launches and seller services

We expect to exit 2018 with a full-year gross margin that is in the mid-60s percent range, and that 2016 gross margin will be in this range as well. We anticipate that the key factors impacting our gross margin forecast over the next three years include:

Continued revenue growth in our existing seller services, driven by both adoption and product enhancements

The impact from new seller services that we intend to launch

We also expect to gain leverage in our operating cost structure over the next three years, particularly within marketing spend.

In 2016, we expect marketing expense as a percent of revenue to decline, but that overall operating expenses as a percent of revenue will increase driven by expenses associated with our new headquarters and with Sarbanes-Oxley compliance.

Finally, from an Adjusted EBITDA margin perspective, we estimate that our margin in 2016 will be comparable to 2015 in the 10-11% range and that it will expand to the high teens range by the end of 2018.

Webcast and Conference Call Replay Information

Etsy will host a webcast to discuss these results at 5:30 p.m. ET today. To access the live webcast, please visit the Etsy Investor Relations website, investors.etsy.com and go to the Investor Events section.

A replay will be available following the live webcast and may be accessed on the same website. A telephonic replay will also be available through midnight ET on March 8, 2016 at (855) 859-2056 or (404) 537-3406; conference ID 44052221.

About Etsy

Etsy is a marketplace where millions of people around the world connect, both online and offline, to make, sell and buy unique goods. The Etsy community includes the creative entrepreneurs who sell on our platform, thoughtful consumers looking to buy unique goods in our marketplace, retailers and manufacturers who partner with Etsy sellers to help them grow their businesses, and Etsy employees who maintain our platform and nurture our ecosystem. Our mission is to reimagine commerce in ways that build a more fulfilling and lasting world, and we’re committed to using the power of business to strengthen communities and empower people.

Etsy was founded in 2005 and is headquartered in Brooklyn, New York.

Investor Relations Contact:
Etsy, Jennifer Beugelmans, ir@etsy.com

Media Relations Contact:
Etsy, Kelly Clausen, press@etsy.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include information related to our possible or assumed future results of operations and expenses, our financial guidance, our mission, business strategies and plans, business environment and future growth. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by words such as “believes,” “expects,” “may,” “plans,” “should,” “will,” “intends,” or similar expressions and the negatives of those words.

Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include (i) our history of operating losses; (ii) the fluctuation of our quarterly operating results; (iii) adherence to our values and our focus on long-term sustainability, which may negatively influence our short- or medium-term financial performance; (iv) the importance to our success of the trustworthiness of our marketplace and the connections within our community; (v) our ability to expand successfully into markets outside of the United States; (vi) increases in our marketing efforts to help grow our business, which may not be effective at attracting and retaining Etsy sellers and buyers; (vii) our payments system, which depends on third-party providers and is subject to evolving laws and regulations; (viii) our ability to add new members to our community, grow our ecosystem and open new sales channels for Etsysellers; (ix) our ability to develop new offerings to respond to the changing needs of Etsy sellers and buyers; (x) the effectiveness of our mobile solutions for Etsy sellers and Etsy buyers; and (xi) our ability to compete effectively. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission, including in the section entitled “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015.

Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update these forward-looking statements.

Etsy, Inc.

Condensed Consolidated Balance Sheets

(in thousands, unaudited)

As of
December 31,
2014 As of
December 31,
2015

ASSETS

Current assets:

Cash and cash equivalents $ 69,659 $ 271,244

Short-term investments 19,184 21,620

Accounts receivable, net 15,404 20,275

Prepaid and other current assets 12,241 9,521

Deferred tax charge—current — 17,132

Funds receivable and seller accounts 10,573 19,262

Total current assets 127,061 359,054

Restricted cash 5,341 5,341

Property and equipment, net 75,538 105,021

Goodwill 30,831 27,752

Intangible assets, net 5,410 2,871

Deferred tax charge—net of current portion — 51,396

Other assets 2,022 1,626

Total assets $ 246,203 $ 553,061

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable $ 8,231 $ 14,382

Accrued expenses 12,852 31,253

Capital lease obligations—current 1,755 5,610

Funds payable and amounts due to sellers 10,573 19,262

Deferred revenue 3,452 4,712

Other current liabilities 4,590 4,903

Total current liabilities 41,453 80,122

Capital lease obligations—net of current portion 3,148 7,571

Warrant liability 1,920 —

Deferred tax liabilities 149 61,420

Facility financing obligation 50,320 51,804

Other liabilities 1,913 21,646

Total liabilities 98,903 222,563

Total convertible preferred stock 80,212 —

Total stockholders’ equity 67,088 330,498

Total liabilities, convertible preferred stock and stockholders’ equity $ 246,203 $ 553,061

Etsy, Inc.

Condensed Consolidated Statements of Operations

(in thousands except share and per share data, unaudited)

Three Months Ended
December 31, Year Ended
December 31,

2014 2015 2014 2015

Revenue $ 64,912 $ 87,895 $ 195,591 $ 273,499

Cost of revenue 22,779 30,196 73,633 96,979

Gross profit 42,133 57,699 121,958 176,520

Operating expenses:

Marketing 14,613 22,476 39,655 66,771

Product development 9,723 11,207 36,634 42,694

General and administrative 17,621 15,600 51,920 68,939

Total operating expenses 41,957 49,283 128,209 178,404

Income (loss) from operations 176 8,416 (6,251) (1,884)

Total other expense (2,431) (6,308) (4,009) (26,110)

(Loss) income before income taxes (2,255) 2,108 (10,260) (27,994)

Provision for income taxes (3,103) (6,340) (4,983) (26,069)

Net loss $ (5,358) $ (4,232) $ (15,243) $ (54,063)

Net loss per share—basic and diluted $ (0.12) $ (0.04) $ (0.38) $ (0.59)

Weighted average common shares outstanding—basic and diluted 43,177,805 111,677,599 40,246,663 91,122,291

Etsy, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)

Year Ended
December 31,

2014 2015

Cash flows from operating activities

Net loss $ (15,243) $ (54,063)

Adjustments to reconcile net loss to net cash provided by operating activities:

Stock-based compensation expense 5,920 8,981

Stock-based compensation expense-acquisitions 4,130 1,860

Contribution of stock to Etsy.org — 3,200

Depreciation and amortization expense 17,223 18,550

Bad debt expense 1,881 1,780

Foreign exchange loss 3,049 21,775

Amortization of debt issuance costs 68 167

Net unrealized loss on warrant and other liabilities 411 3,133

Loss on disposal of assets 79 1,319

Amortization of deferred tax charges — 17,132

Excess tax benefit from exercise of stock options (4,877) (3,944)

Changes in operating assets and liabilities, net of acquisitions (554) 9,321

Net cash provided by operating activities 12,087 29,211

Cash flows from investing activities

Acquisition of businesses, net of cash acquired (4,688) —

Purchases of property and equipment (1,304) (11,116)

Development of internal-use software (8,280) (9,719)

Purchase of U.S. Government and agency bills (21,698) (26,040)

Sale of marketable securities 20,588 23,592

Net increase in restricted cash (5,341) —

Net cash used in investing activities (20,723) (23,283)

Cash flows from financing activities

Proceeds from public offering — 199,467

Proceeds from the issuance of common stock 35,000 —

Proceeds from exercise of stock options 7,956 3,626

Excess tax benefit from the exercise of stock options 4,877 3,944

Payments on capitalized lease obligations (1,480) (3,377)

Deferred payments on acquisition of business (75) —

Payments relating to public offering (1,041) (4,052)

Net cash provided by financing activities 45,237 199,608

Effect of exchange rate changes on cash (3,737) (3,951)

Net increase in cash and cash equivalents 32,864 201,585

Cash and cash equivalents at beginning of period 36,795 69,659

Cash and cash equivalents at end of period $ 69,659 $ 271,244

Use of Non-GAAP Financial Measures

In this press release, we provide Adjusted EBITDA, a non-GAAP financial measure that represents our net loss before interest expense, net, provision for income taxes and depreciation and amortization, adjusted to eliminate stock-based compensation expense, net unrealized loss on warrant and other liabilities, foreign exchange loss, other non-operating expense, net, contributions to Etsy.org and acquisition-related expenses. Following is a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA in this press release because it is a key measure used by our management and board of directors to evaluate our operating performance and trends, allocate internal resources, prepare and approve our annual budget, develop short- and long-term operating plans and assess the health of our business. As our Adjusted EBITDA increases, we are able to invest more in our platform. We believe that Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business as it removes the impact of certain non-cash items and certain variable charges.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

Adjusted EBITDA does not consider the impact of stock-based compensation expense or changes in the fair value of warrants;

Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

Adjusted EBITDA does not reflect acquisition-related expenses;

Adjusted EBITDA does not consider the impact of foreign exchange loss;

Adjusted EBITDA does not reflect other non-operating expenses, net of other non-operating income, including net interest expense (income);

Adjusted EBITDA does not reflect the impact of our contributions to Etsy.org; and

other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.

Etsy is not able, at this time, to provide GAAP targets for net income margin for 2016 and 2016-2018 because of the difficulty of estimating certain items that are excluded from non-GAAP adjusted EBITDA margin, including interest expense, net, provision for income taxes, depreciation and amortization, stock-based compensation expense, net unrealized loss on warrant and other liabilities, foreign exchange loss, other non-operating expense, net, contributions to Etsy.org and acquisition-related expenses, the effect of which may be significant.

Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA

(in thousands, unaudited)

Three Months Ended
December 31, Year Ended
December 31,

2014 2015 2014 2015

Net loss $ (5,358) $ (4,232) $ (15,243) $ (54,063)

Excluding:

Interest and other non-operating expense, net 224 263 549 1,202

Provision for income taxes (1) 3,103 6,340 4,983 26,069

Depreciation and amortization 4,731 4,509 17,223 18,550

Stock-based compensation expense (2) 1,708 2,422 5,920 8,981

Stock-based compensation expense—acquisitions (2) 2,334 (1,298) 4,130 1,860

Net unrealized loss (gain) on warrant and other liabilities 172 (3) 411 3,133

Foreign exchange loss (3) 2,035 6,048 3,049 21,775

Acquisition-related expenses 349 — 2,059 —

Contribution to Etsy.org (4) — — — 3,500

Adjusted EBITDA $ 9,298 $ 14,049 $ 23,081 $ 31,007

(1) The provision for income taxes in the three and twelve months ended December 31, 2015 reflects the impact of the revised global corporate structure implemented on January 1, 2015.

(2) Total stock-based compensation expense included in the consolidated statements of operations is as follows (in thousands):

Three Months Ended
December 31, Year Ended
December 31,

2014 2015 2014 2015

Cost of revenue $ 382 $ 190 $ 1,113 $ 871

Marketing 85 211 216 560

Product development 466 879 1,461 2,860

General and administrative 3,109 (156) 7,260 6,550

Total stock-based compensation expense $ 4,042 $ 1,124 $ 10,050 $ 10,841

(3) The majority of the foreign exchange loss in the three and twelve months ended December 31, 2015 relates to intercompany debt incurred in connection with Etsy’s revised global corporate structure.

(4) Etsy made a one-time contribution of 188,235 shares of common stock totaling $3.2 million to Etsy.org during the first quarter of 2015. In addition, Etsy made a one-time cash contribution of$300,000 to Etsy.org during the second quarter of 2015.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/etsy-inc-reports-fourth-quarter-and-full-year-2015-financial-results-300224883.html

SOURCE Etsy, Inc.

February 23, 2016

Etsy Adds Express Checkout to iOS App

Etsy announced that it’s rolling out Express Checkout with Apple Pay on in its iOS app. This lets buyers skip the shopping cart and check out in two steps.

The feature became available for signed-in US users on desktop and mobile web last year, but the Apple Pay integration with the app is brand new.

“Our strategic priorities include making Etsy an everyday experience for our users, which starts with making it easy and engaging to use Etsy on mobile devices, and enhancing our local solutions, like payments and shipping, for members around the world,” says Etsy’s Stephanie Grodin.

“Now Express Checkout is even easier — buyers can tap the ‘Buy it Now’ button, select Apple Pay, place their thumb on Touch ID, and be on their way,” she says. “Buyers who don’t wish to use Apple Pay or who don’t have Touch ID-enabled iOS devices can simply continue to pay with their stored credit card information or PayPal.”

Etsy also recently expanded Direct Checkout to 12 new countries. It now offers the feature in 34 countries altogether.

Image via Etsy

February 5, 2016
Etsy Launches Shop Videos For Sellers

Etsy announced the launch of a new feature for sellers called Shop Videos aimed at giving them a new way to give buyers a closer look at their story and what goes into creating their shops and items.

The feature is accessible via the Sell on Etsy app. Sellers can upload videos from their phones and share them on social media from there. If you already have video content related to your shop, you can also upload that.

“With screen real estate smaller on mobile devices and the ability to personalize more challenging, video provides an opportunity to share a lot of information in a limited space,” says Etsy’s Dilani Kahawala. “We’ve seen our buyers make a big shift towards using mobile devices for shopping on Etsy with 60% of our traffic now coming from mobile. Shop Videos enables Etsy sellers to better connect with those buyers on their mobile devices and share their stories in a highly visual, personal way.”

“For iOS users of the Sell on Etsy app, we have also built a video editing tool that guides users through the process of making a short video from start to finish,” she adds. “Through this tool, sellers are able to film segments of video from their smartphones, add transitions and background music, and have the whole thing stitched together into a complete narrative. The five music tracks available in the tool were even written and performed by some of our very own talented Etsy employees.”

The videos are viewable on the web or via the Etsy app.

If you need some help with video creation, Etsy has a guide available here.

As of September, Etsy has 1.5 million active sellers.

Image via Etsy

January 19, 2016
Etsy Announces Wholesale Guidelines To Benefit Sellers

Etsy announced that starting today, Etsy Wholesale will begin requiring all retail partners to agree to specific guidelines. These are as follows:

– Pay the price listed on the seller’s Etsy Wholesale line sheet for at least the first six months.

– Offer Etsy sellers quick and fair payment terms.

– Provide Etsy sellers with a personal point of contact to assist with supplier compliance, penalty avoidance and vendor set up.

– Respect the Etsy seller’s intellectual property.

– Recognize product authorship in stores and online. Whenever possible, include the name of the designer in product merchandising.

– Work with Etsy sellers to respect their values and preferences related to the production process and material selection of their products.

According to the company, Etsy now includes 11,000 retailers and over 4,500 sellers among its Etsy Wholesale community.

Etsy also announced that Macy’s is its newest retail partner, and that beginning in Spring, Macy’s in NYC will stock products from Etsy designers. Other partners include Whole Foods Market, The Land of Nod, and Lou & Grey.

Image via Etsy

November 17, 2015

Etsy Earnings Released, Net Loss $6.9 Million

Etsy just released its Q3 financials, posting a net less of $6.9 million ( 6 cents per share). Revenue was $65.7 million, up from $47.6 million from the same period last year.

Shareholders aren’t thrilled as shares are tanking in after hours trading.

Etsy CEO and Chairman Chad Dickerson said, “During the third quarter the growth in the Etsy Economy continued, and we generated more than $1.6 billion in GMS year-to-date and supported more than 1.5 million active sellers and 22.6 million active buyers. We are looking forward to a great holiday season and are continuing to innovate and build new products and services on our platform that empower Etsy’s creative entrepreneurs to succeed on their own terms. Our commitment to reimagining commerce, our understanding of the needs of artisans and our dedication to our vibrant community will continue to differentiate the Etsy marketplace from all others.”

Here’s the release in its entirety:

NEW YORK, Nov. 3, 2015 /PRNewswire/ — Etsy, Inc. (NASDAQ: ETSY), a marketplace where people around the world connect, both online and offline, to make, sell and buy unique goods, today announced financial results for its third quarter 2015, ended September 30, 2015.

“During the third quarter the growth in the Etsy Economy continued, and we generated more than $1.6 billion in GMS year-to-date and supported more than 1.5 million active sellers and 22.6 million active buyers,” said Chad Dickerson, Etsy, Inc. CEO and Chairman. “We are looking forward to a great holiday season and are continuing to innovate and build new products and services on our platform that empower Etsy’s creative entrepreneurs to succeed on their own terms. Our commitment to reimagining commerce, our understanding of the needs of artisans and our dedication to our vibrant community will continue to differentiate the Etsy marketplace from all others.”

Third Quarter 2015 Financial Summary

(in thousands)

Three Months Ended
September 30, % Growth
Y/Y Nine Months Ended
September 30, % Growth
Y/Y

2014 2015 2014 2015

GMS $ 467,202 $ 568,787 21.7% $ 1,320,507 $ 1,646,899 24.7%

Revenue $ 47,634 $ 65,696 37.9% $ 130,679 $ 185,604 42.0%

Marketplace revenue $ 26,917 $ 32,232 19.7% $ 75,421 $ 92,852 23.1%

Seller Services revenue $ 19,392 $ 32,329 66.7% $ 51,812 $ 89,378 72.5%

Adjusted EBITDA $ 4,248 $ 6,224 46.5% $ 13,783 $ 16,958 23.0%

Active sellers 1,284 1,533 19.4% 1,284 1,533 19.4%

Active buyers 18,102 22,603 24.9% 18,102 22,603 24.9%

Percent mobile visits 55% 60% 500 bps 53% 60% 700 bps

Percent mobile GMS 38% 44% 600 bps 37% 43% 600 bps

Percent international GMS 31.6% 29.3% (230) bps 31.1% 30.0% (110) bps

For information about how we define these metrics, see our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015.

Third Quarter 2015 Operational Highlights

GMS was $568.8 million, up 21.7% compared with the third quarter of 2014. Growth in GMS was driven by 19.4% year-over-year growth in active sellers and 24.9% year-over-year growth in active buyers. During the third quarter, Etsy continued to strengthen its mobile footprint and mobile visits continued to grow faster than desktop visits. Percent mobile visits was approximately 60% compared with approximately 55% in the third quarter of 2014 and percent mobile GMS was approximately 44% compared with approximately 38% in the third quarter of 2014. This compares with percent mobile visits of approximately 60% and percent mobile GMS of approximately 43% in the second quarter of 2015. As a result of our strong year-over-year GMS growth on our buyer mobile app, we continued to make progress in narrowing the gap between mobile visits and mobile GMS.

We continue to believe that we can grow international GMS, over time, to represent 50% of our total GMS and that the impact of currency exchange rates contributed to the year-over-year decline in percent international GMS, which was 29.3% in the third quarter of 2015. Percent international GMS was 30.2% in the second quarter of this year.

We believe our GMS growth and percent international GMS are impacted by currency exchange rates in two ways. First, approximately 9% of our GMS comes from goods that are not listed in U.S. dollars and as a result is subject to the impact of currency exchange fluctuations. The percentage of GMS from goods that are not listed in U.S. dollars is consistent with what we reported in the second quarter of 2015. Excluding this direct impact, on a currency-neutral basis, GMS growth in the third quarter of 2015 would have been 23.5% or approximately 1.8 percentage points higher than the as-reported 21.7% growth.

Second, we believe weaker local currencies in key international markets continued to dampen the demand for U.S. dollar-denominated goods during the third quarter of 2015. For example, during the third quarter of 2015, GMS from international buyers purchasing from U.S. sellers declined approximately 12.5% year-over-year, compared with an approximate 6% year-over-year decline in the second quarter of 2015 and approximately 0.3%, 23% and 43% year-over-year growth in the first quarter of 2015, and the fourth and third quarters of 2014 respectively. In contrast, excluding our French marketplace ALM, GMS from international buyers making purchases from sellers in their own country grew approximately 45% year-over-year during the third quarter of 2015.

Taken together, we estimate that the impact of currency translation on goods not listed in U.S. dollars and the impact of currency exchange rates on international buyer behavior reduced our year-over-year GMS growth rate by approximately three to five percentage points in the third quarter.

Third Quarter 2015 Financial Highlights

Total revenue was $65.7 million, up 37.9% year-over-year, driven by growth in both Marketplace and Seller Services revenue. Marketplace revenue grew 19.7%, primarily due to growth in transaction fee revenue and, to a lesser extent, growth in listing fee revenue. Seller Services revenue grew 66.7% year-over-year, primarily due to growth in revenue from Promoted Listings, which continued to benefit from the re-launch of the product at the end of the third quarter of 2014. Seller Services revenue also benefited from growth in revenue from Direct Checkout and Shipping Labels, which both grew faster than GMS in the third quarter.

Gross profit for the third quarter was $41.5 million, up 40.7% year-over-year, and gross margin was 63.2%, up 120 bps compared with 62.0% in the third quarter of 2014. Similar to the first and second quarters of 2015, gross profit grew faster than revenue in the third quarter because of leverage in the cost of revenue for employee-related costs. In addition, growth of a higher-margin revenue stream, Promoted Listings, outpaced growth of lower-margin Direct Checkout revenue.

Total operating expenses were $43.2 million in the third quarter, up 32.6% year-over-year. Total operating expenses as a percent of revenue declined to 65.8% in the third quarter of 2015 compared with 68.4% in the third quarter of 2014, as revenue growth continued to outpace operating expense growth.

The overall increase in operating expenses was primarily driven by the planned increase in reported marketing expenses, which grew 87.8% year-over-year mostly due to increased spending on product listing ads and employee-related expenses within our seller development and brand design cost centers. Year-over-year growth in reported marketing expenses in the third quarter of 2015, as well as in the first and second quarters of 2015, was also impacted by business changes and reorganizations that occurred in September 2014, when we moved certain expenses, such as brand design, brand research and seller development, into marketing expenses, most of which had previously been recorded in product development. Excluding the impact of these changes, comparable marketing expenses in the third quarter of 2015 grew 74.0% year-over-year. For reference, excluding the impact of the business changes and reorganizations, year-over-year comparable marketing expenses grew approximately 45% in the first quarter of 2015 and approximately 57% in the second quarter of 2015.

Reported product development expenses grew 13.2% year-over-year, primarily due to higher employee-related expenses. Similar to reported marketing expenses growth, year-over-year growth in reported product development expenses in the third quarter of 2015, as well as the first and second quarters of 2015, was also impacted by the previously mentioned business changes and reorganizations made in September 2014. Excluding the impact of these changes, comparable product development expenses grew 18.3% year-over-year compared with the third quarter of 2014. For reference, excluding the impact of business changes and reorganizations, year-over-year comparable product development expenses grew approximately 34% in the first quarter of 2015 and approximately 25% in the second quarter of 2015.

G&A expenses grew 11.4% year-over-year, mostly driven by higher employee-related expenses and consulting fees.

Non-GAAP Adjusted EBITDA for the third quarter was $6.2 million and grew 46.5% year-over-year. Adjusted EBITDA margin was 9.5%, up 60 bps year-over-year.

Net loss for the third quarter of 2015 was $6.9 million, compared with a $6.3 million net loss in the third quarter of 2014. Etsy’s net loss in the third quarter of 2015 was impacted by an increase to our tax provision. We recorded a $4.1 million tax provision in the third quarter of 2015 that included non-cash charges related to the revised global corporate structure that we implemented on January 1, 2015 and forecasted pre-tax income that were partially offset by the benefit from a research and development tax credit.

Net cash provided by operating activities was $5.4 million in the third quarter of 2015 compared with$5.1 million in the third quarter of 2014.

Cash, marketable securities and short-term investments were $286.8 million as of September 30, 2015 and included $194.4 million in net proceeds from our initial public offering.

Fourth Quarter 2015 Outlook: Factors to Consider

We’d like to highlight a few factors that we believe will impact Etsy’s fourth quarter 2015 results.

First, from an overall business perspective, we’re excited about our competitive position as we head into the fourth quarter – our biggest quarter of the year – and the holiday season. We have launched a holiday campaign that we believe is our strongest holiday effort to date.

Even so, just as we conveyed in the first and second quarters of 2015, if currency exchange rates remain at current levels, then currency translation will continue to negatively affect reported GMS growth for goods that are not listed in U.S. dollars and will also continue to dampen the demand for U.S. dollar-denominated goods from buyers outside of the United States.

The second qualitative factor we’d like to highlight is that from a modeling perspective, the operating leverage that we achieved in the third quarter will not repeat in the fourth quarter for a few reasons:

First, although Etsy’s gross margin has expanded year-over-year during each of the first three quarters of 2015, we do not expect that to continue in the fourth quarter for two reasons. The first is that the fourth quarter of 2015, as we have discussed previously, will be the first full quarter following the anniversary of the re-launch of Promoted Listings. We expect the year-over-year revenue growth rate for Promoted Listings to decelerate significantly compared with the first three quarters of 2015 to a level that is below that of Direct Checkout, which is a lower-margin revenue stream. The second reason is that we expect Direct Checkout to benefit from our recent integration of PayPal. This shift in Seller Services revenue growth drivers is expected to be a drag on our gross margin.

Second, as in the first three quarters of the year, we plan to spend more on marketing in absolute dollars in the fourth quarter compared with both the third quarter of 2015 and the fourth quarter of 2014. Therefore, we expect marketing expenses to continue to grow faster than our revenue in the fourth quarter. Despite this, we expect the year-over-year growth rates for overall marketing expenses to decelerate in the fourth quarter compared with both the third quarter of 2015 and the fourth quarter of 2014. We also expect digital marketing expenses to grow more slowly year-over-year in the fourth quarter of 2015 compared to year-over-year growth in the third quarter of 2015.

Finally, we expect our number of net hires in the fourth quarter of 2015 to be comparable to the third quarter of 2015 but to be higher than the fourth quarter of 2014.

Webcast and Conference Call Replay Information

Etsy will host a webcast to discuss these results at 5:30 p.m. ET today. To access the live webcast, please visit the Etsy Investor Relations website, investors.etsy.com and go to the Investor Events section.

A replay will be available following the live webcast and may be accessed on the same website. A telephonic replay will also be available through midnight ET on November 17, 2015 at (855) 859-2056 or (404) 537-3406; conference ID 58447367.

About Etsy

Etsy is a marketplace where millions of people around the world connect, both online and offline, to make, sell and buy unique goods. The Etsy ecosystem includes creative entrepreneurs who sell on our platform, thoughtful consumers looking to buy unique goods in our marketplace, responsible manufacturers who help Etsy sellers grow their businesses and Etsy employees who maintain our platform and nurture our community. Our mission is to reimagine commerce in ways that build a more fulfilling and lasting world, and we’re committed to using the power of business to strengthen communities and empower people.

Etsy was founded in 2005 and is headquartered in Brooklyn, New York.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include information related to our possible or assumed future results of operations and expenses, our fourth quarter outlook, our mission, business strategies and plans, business environment and future growth. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as “believes,” “expects,” “may,” “plans,” “should,” “will,” or similar expressions and the negatives of those terms.

Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include (i) our history of operating losses; (ii) the fluctuation of our quarterly operating results; (iii) adherence to our values and our focus on long-term sustainability, which may negatively influence our short- or medium-term financial performance; (iv) the importance to our success of the authenticity of our marketplace and the connections within our community; (v) further expansion into markets outside of the United States; (vi) increases in our marketing efforts to help grow our business, which may not be effective at attracting new members and retaining existing members; (vii) our payments system, which depends on third-party providers and is subject to evolving laws and regulations; (viii) our ability to expand our ecosystem to add new constituents and open new sales channels; (ix) our ability to develop new offerings to respond to our members’ changing needs; (x) the effectiveness of our mobile solutions forEtsy sellers and Etsy buyers; and (xi) our ability to compete effectively. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission, including in the section entitled “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update these forward-looking statements.

Etsy, Inc.

Condensed Consolidated Balance Sheets

(in thousands, unaudited)

As of
December 31,
2014 As of
September 30,
2015

ASSETS

Current assets:

Cash and cash equivalents $ 69,659 $ 266,283

Short-term investments 19,184 20,474

Accounts receivable, net 15,404 15,976

Prepaid and other current assets 12,241 8,773

Deferred tax assets—current 2,932 3,134

Deferred tax charge—current — 17,605

Funds receivable and seller accounts 10,573 17,069

Total current assets 129,993 349,314

Restricted cash 5,341 5,341

Property and equipment, net 75,538 94,655

Goodwill 30,831 28,366

Intangible assets, net 5,410 3,483

Deferred tax charge—net of current portion — 55,711

Other assets 2,022 1,751

Total assets $ 249,135 $ 538,621

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable $ 8,231 $ 3,200

Accrued expenses 12,852 32,861

Capital lease obligations—current 1,755 4,431

Funds payable and amounts due to sellers 10,573 17,069

Deferred revenue 3,452 4,128

Other current liabilities 4,590 7,925

Total current liabilities 41,453 69,614

Capital lease obligations—net of current portion 3,148 6,483

Warrant liability 1,920 —

Deferred tax liabilities 3,081 66,227

Facility financing obligation 50,320 51,804

Other liabilities 1,913 21,699

Total liabilities 101,835 215,827

Total convertible preferred stock 80,212 —

Total stockholders’ equity 67,088 322,794

Total liabilities, convertible preferred stock and stockholders’ equity $ 249,135 $ 538,621

Etsy, Inc.

Condensed Consolidated Statements of Operations

(in thousands except share and per share data, unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,

2014 2015 2014 2015

Revenue $ 47,634 $ 65,696 $ 130,679 $ 185,604

Cost of revenue 18,115 24,165 50,854 66,783

Gross profit 29,519 41,531 79,825 118,821

Operating expenses:

Marketing 8,808 16,542 25,042 44,295

Product development 10,077 11,406 26,911 31,487

General and administrative 13,686 15,250 34,299 53,339

Total operating expenses 32,571 43,198 86,252 129,121

Loss from operations (3,052) (1,667) (6,427) (10,300)

Total other expense (1,144) (1,129) (1,578) (19,802)

Loss before income taxes (4,196) (2,796) (8,005) (30,102)

Provision for income taxes (2,075) (4,095) (1,880) (19,729)

Net loss $ (6,271) $ (6,891) $ (9,885) $ (49,831)

Net loss per share—basic and diluted $ (0.15) $ (0.06) $ (0.25) $ (0.59)

Weighted average shares outstanding—basic and diluted 43,015,151 111,329,917 39,258,879 84,195,227

Etsy, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)

Nine Months Ended
September 30,

2014 2015

Cash flows from operating activities

Net loss $ (9,885) $ (49,831)

Adjustments to reconcile net loss to net cash provided by operating activities:

Stock-based compensation expense 4,212 6,559

Stock-based compensation expense-acquisitions 1,796 3,158

Contribution of stock to Etsy.org — 3,200

Depreciation and amortization expense 12,492 14,041

Bad debt expense 1,037 1,473

Foreign exchange loss 1,014 15,727

Amortization of debt issuance costs 40 122

Net unrealized loss on warrant and other liabilities 239 3,136

Loss on disposal of assets 76 476

Amortization of deferred tax charges — 15,093

Excess tax benefit from exercise of stock options (716) (2,472)

Changes in operating assets and liabilities, net of acquisitions 1,681 8,325

Net cash provided by operating activities 11,986 19,007

Cash flows from investing activities

Acquisition of businesses, net of cash acquired (4,688) —

Purchases of property and equipment (881) (9,524)

Development of internal-use software (6,019) (7,329)

Purchase of U.S. Government and agency bills (17,209) (18,552)

Sale of marketable securities 16,846 17,270

Net increase in restricted cash (5,341) —

Net cash used in investing activities (17,292) (18,135)

Cash flows from financing activities

Proceeds from public offering — 199,467

Proceeds from the issuance of common stock 35,000 —

Proceeds from exercise of stock options 7,585 2,285

Excess tax benefit from the exercise of stock options 716 2,472

Payments on capitalized lease obligations (1,051) (2,262)

Deferred payments on acquisition of business (75) —

Payments relating to public offering (1,160) (2,919)

Net cash provided by financing activities 41,015 199,043

Effect of exchange rate changes on cash (1,305) (3,291)

Net increase in cash and cash equivalents 34,404 196,624

Cash and cash equivalents at beginning of period 36,795 69,659

Cash and cash equivalents at end of period $ 71,199 $ 266,283

Use of Non-GAAP Financial Measures

In this press release, we provide Adjusted EBITDA, a non-GAAP financial measure that represents our net loss before interest expense, net, (benefit) provision for income taxes and depreciation and amortization, adjusted to eliminate stock-based compensation expense, net unrealized loss (gain) on warrant and other liabilities, foreign exchange loss (gain), contributions to Etsy.org and acquisition-related expenses. Following is a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA in this press release because it is a key measure used by our management and board of directors to evaluate our operating performance and trends, allocate internal resources, prepare and approve our annual budget, develop short- and long-term operating plans and assess the health of our business. As our Adjusted EBITDA increases, we are able to invest more in our platform. We believe that Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our business as it removes the impact of certain non-cash items and certain variable charges.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

Adjusted EBITDA does not consider the impact of stock-based compensation expense or changes in the fair value of warrants;

Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

Adjusted EBITDA does not reflect acquisition-related expenses;

Adjusted EBITDA does not consider the impact of foreign exchange loss (gain);

Adjusted EBITDA does not reflect the impact of our contributions to Etsy.org; and

other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.

Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA

(in thousands, unaudited)

Three Months Ended
September 30, Nine Months Ended
September 30,

2014 2015 2014 2015

Net loss $ (6,271) $ (6,891) $ (9,885) $ (49,831)

Excluding:

Interest expense, net 165 453 325 939

Provision for income taxes (1) 2,075 4,095 1,880 19,729

Depreciation and amortization 4,465 4,968 12,492 14,041

Stock-based compensation expense (2) 1,299 2,204 4,212 6,559

Stock-based compensation expense—acquisitions (2) 1,448 719 1,796 3,158

Net unrealized (gain) loss on warrant and other liabilities (35) (3) 239 3,136

Foreign exchange loss (3) 1,014 679 1,014 15,727

Acquisition-related expenses 88 — 1,710 —

Contribution to Etsy.org (4) — — — 3,500

Adjusted EBITDA $ 4,248 $ 6,224 $ 13,783 $ 16,958

(1) The provision for income taxes in the three and nine months ended September 30, 2015 reflects the impact of the revised global corporate structure implemented on January 1, 2015.

(2) Total stock-based compensation expense included in the consolidated statements of operations is as follows (in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,

2014 2015 2014 2015

Cost of revenue $ 357 $ 149 $ 731 $ 681

Marketing 59 120 131 349

Product development 333 756 995 1,981

General and administrative 1,998 1,898 4,151 6,706

Total stock-based compensation expense $ 2,747 $ 2,923 $ 6,008 $ 9,717

(3) The majority of the foreign exchange loss in the nine months ended September 30, 2015 relates to intercompany debt incurred in connection with Etsy’s revised global corporate structure.

(4) Etsy made a one-time contribution of 188,235 shares of common stock totaling $3.2 million to Etsy.org during the first quarter of 2015. In addition, Etsy made a one-time cash contribution of $300,000 to Etsy.org during the second quarter of 2015.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/etsy-inc-reports-third-quarter-2015-financial-results-300171572.html

SOURCE Etsy, Inc.

Image via Etsy

November 3, 2015

Etsy ASAP Lets Users Get Same-Day Delivery

Etsy announced the launch of Etsy ASAP as a limited pilot in areas of New York City, giving shoppers the ability to have items delivered on the same or next day for a flat fee of $20.

“This pilot, slated to run through the holiday season, arrives on the heels of the new Etsy Local mobile experience, which helps shoppers on-the-go find Etsy items and sellers nearby at events or local shops, and is the latest example of Etsy’s efforts to foster and grow local marketplaces,” an Etsy spokesperson tells WebProNews.

According to the company, over half of buyers it surveyed said they would use Etsy ASAP for last minute gifts.

“We are excited to bring these new services to the Etsy community–they will improve the shopping experience while offering new ways for sellers to connect with and grow their customer base,” the spokesperson says. “Etsy ASAP, like Etsy Local, will encourage more opportunities for person-to-person commerce and offer a solution for last minute shopping needs, in a way that benefits the whole community.”

When a user selects Etsy ASAP during the checkout process, they’ll be able to choose from three-hour delivery windows based on seller availability. Orders placed after 7PM are eligible for next-day delivery rather than same-day.

You can browse items currently eligible for Etsy ASAP here. There are over 5,000 products currently available to those residing in the right areas.

Searches on Etsy can be filtered to only display items eligible. More about the service on the Etsy blog.

Images via Etsy

October 26, 2015
Etsy Manufacturing Opened Up To Etsy Designers

Etsy announced that it is launching Etsy Manufacturing in beta for Etsy designers. The offering will let designers connect with the manufacturing community as announced last month.

In September, Etsy announced the launch of the Etsy Manufacturing Marketplace and invited manufacturing businesses and individual makers to apply for that. The company works with its seller community to build “responsible partnerships.”

“Since we announced Etsy Manufacturing, we’ve already received interest from more than 500 manufacturers, from our own backyard in Brooklyn to the wide open spaces of Montana to the suburbs of Ontario,” an Etsy spokesperson said in an email. “Many of the applications have come from Etsy sellers themselves. Sellers are no stranger to collaborating with other sellers, and we’ve heard over the years that many work together in a production capacity. Community between sellers has always been one of the most vibrant things about Etsy, and we’re thrilled this marketplace can help foster this ecosystem.”

“Our principles of authorship, responsibility and transparency have guided us for two years and will continue to do so,” the spokesperson added. “We’ve reviewed and approved manufacturer applications on an individual basis according to a number of criteria, such as their commitment to transparency, the degree to which they allow subcontracting, and their size. Manufacturers on Etsy Manufacturing must also agree to a series of commitments on transparency, safe and just workplaces, and customer service.”

For the marketplace, Etsy started with the apparel and textiles, machining and fabrication, printing, and jewelry and metalwork categories.

Etsy Manufacturing is being made available in the United States and Canada. More on what the offering means for designers here.

Image via Etsy

October 22, 2015
‘Handmade At Amazon’ Launched For Artisan Ecommerce

Amazon announced the launch of Handmade at Amazon, a new store for handmade items crafted and sold directly from artisans. In other words, here’s Amazon’s direct competitor to Etsy at both the seller and consumer levels.

The store includes product categories like Jewelry, Home Décor, Artwork, Stationery and Party Supplies, Kitchen and Dining, and Furniture.

“With Handmade at Amazon, customers can discover artisans from around the world, and shop local from artisans based in their community with the familiar Amazon experience they know and trust,” Amazon says. “Handmade at Amazon was designed to provide customers and artisans a tailored store specifically for handcrafted items. All products available on Handmade at Amazon are factory-free and must be made by hand.”

“We have designed a custom shopping experience for customers looking for handmade items by bringing together many of the best artisans in the world, and they’re adding thousands of items daily,” adds Peter Faricy, VP for Amazon Marketplace. “Knowing an item has a unique story behind it creates a personal experience that customers have told us makes owning handmade items special. Handmade at Amazon offers customers more than 80,000 quality handcrafted items from around the world, and over 30 percent can be personalized by artisans to delight customers.”

Users can shop by country to find items from artisans in over 60 countries, or they can shop locally at the state level.

At launch, over 600 items from Handmade at Amazon are Prime eligible, and more will continue to be added on a daily basis.

Every product page in the store features a location icon showing where the artisan is based in addition to a link to the artisan’s profile.

Image via Amazon

October 8, 2015
Etsy Manufacturing Marketplace Announced To Pair Sellers With Outside Manufacturers

Etsy announced that it will soon launch Etsy Manufacturing, a new program that pairs product designers with manufacturers. A couple years ago, Etsy began letting approved sellers use production assistance, and the new move could be seen as something of an expansion of that.

The company says it wants to make it easier for sellers to “source responsible production assistance” when they need it.

“We changed our policies in 2013 for a few reasons,” says Etsy’s Heather Jassy. “First, we’d encountered a number of artists who were working in truly thoughtful ways that weren’t allowed within Etsy’s policies. We’d also been following the evolution in small-scale manufacturing, and believed (as we still do) that designers and makers can work cooperatively with others to bring their ideas to life in ways that are good for communities and good for commerce. Most of all, we wanted to empower sellers to construct their businesses and lives in ways that work best for them, on their own terms. Our sellers tell us over and over that growing responsibly is important to them, and we want to enable that.”

Since June, Etsy has approved about 5,000 outside manufacturers, resulting in over 7,800 partnerships. When the company reviews seller applications for manufacturer partnerships, it focuses on authorship, responsibility, and transparency. Creation of items must begin with the seller, the seller must be “invested and knowledgeable” about production of the items, and the seller must represent their products “openly, honesty, and accurately”.

“Our vision of responsible manufacturing centers on people, access and transparency,” says Jassy. “It’s a model in which Etsy designers can preserve the spirit of craftsmanship and grow responsibly by collaborating with small-scale manufacturers to make their goods. We believe that the often faceless, opaque model of mass manufacture is due for an overhaul; the people and processes behind partnerships can be celebrated.”

Etsy Manufacturing takes the form of a new marketplace in which sellers can find and connect with prospective manufacturers. Etsy is starting with the apparel and textiles, machining and fabrication, printing, and jewelry and metalwork categories. While this is all fine and good, the company admits that during the program’s pilot, sellers have found it difficult to find a good partner. Ultimately, finding a good one still falls upon the seller. While Etsy does review applications, it doesn’t do direct audits or site visits.

Etsy went public in April and has been making plenty of moves to benefit buyers and sellers alike, and ultimately spur more sales. Last month, they made Etsy Local available on their mobile apps.

Etsy Manufacturing will launch in the United States and Canada.

Image via Etsy

September 14, 2015
Etsy Local Now Available On Android, iOS

Late last year, Etsy launched the Etsy Local pilot program, which enabled select shoppers to get push notifications from the Etsy Android or iOS app that alerted them when an Etsy seller is selling at a local event.

“Etsy Local push notifications are a new way for Etsy sellers and buyers to connect locally and in-person,” a spokesperson for Etsy told us at the time. “It connects sellers participating in fairs and markets to shoppers in their area; shoppers can meet and buy from sellers in-person, supporting both the Etsy community and their own local economies.”

The company just announced that the feature is now getting a proper launch on both operating systems. A spokesperson tell us in an email:

Etsy is committed to finding ways to bring the online world together with offline shopping experiences, creating even more meaningful connections between buyers and sellers. And now, with Etsy Local for mobile, people can shop just around the corner! Through the Etsy app for iOS and Android, shoppers can now more easily discover nearby stores that feature their favorite sellers, and connect in-person when a seller is at a market or an in-store event.

Etsy Local not only allows shoppers to discover great boutiques and markets in their local area to shop vintage and handmade, but also view recommended stores and events in their area that are tailored to their tastes based on the types of shops and sellers they have previously engaged with. The Etsy Local experience also incorporates a newer member of the Etsy community – retailers – and encourages buyers to shop from them, supporting their local communities.

When you open the Local tab fro the app, recommended nearby retailers and events (tailored to user tastes) will appear. They’re based on shops and sellers you’ve previously engaged with through favoriting, purchasing, and browsing. You can find the feature from the Home page and click on a map or listing to see more info, like hours of operation, available items, etc.

Another cool part about the feature is that you can use it when you’re traveling to find shopping destinations.

Naturally, the feature will benefit sellers who sell offline as the feature should up their visibility a great deal.

Etsy talks more about the feature in a blog post here.

Image via Etsy

August 25, 2015
Shareaholic Adds More Sites To Follow Button Lineup

Shareaholic, the company behind the popular social media button share tools, announced that it has added some new sites to its Follow Button lineup. In other words, sites can use these buttons to get people to follow them on more services.

The new additions include GitHub, Etsy, and Houzz.

“Are you a tech guru with a specialty, or a blossoming developer with a curiosity you want to explore on Github?” writes Shareaholic’s Cameron Seher in a blog post. “Perhaps you are one of the many thousands of artisans selling, or the millions of users buying beautiful goods on Etsy? Or maybe you are a DIY blogger, featuring a home renovation project on Houzz? Help to make your site’s followers true disciples of your passions by strengthening your follow-ship on these three wildly popular, targeted platforms.”

Shareaholic also added Microsoft OneNote to its list of share options.

“You already know that we recently added WhatsApp, and SMS Client, to our Share Button Services. Now, offer your users sharing to Microsoft OneNote,” says Seher. “With a user base that according to Microsoft doubled in 2014, and with Microsoft integrating OneNote with Windows 10, this can’t be missed as the go-to sharing platform for users across Windows devices in the future!”

Last month, Shareaholic added a total share count option to its share buttons. More on that here.

Images via Thinkstock, Shareaholic

August 18, 2015
Etsy’s Most Active Sellers Get New Support Program

Etsy announced the launch of a new Seller Account Management Program, which it is positioning as another option, in addition to its phones, email forums, and Seller Handbook, for seller support.

The program offers what the company calls “tailored, high-touch support” to the marketplace’s most active sellers. It initially started as a pilot with a few sellers, but now they’re opening up 50 more slots, which active sellers can apply for. You can apply anytime before September 15th, and they’ll open applications to additional sellers next year.

“We’ve found that sellers’ support needs tend to change as their shops grow and they branch into new product lines and sales channels,” says Etsy’s Camilla Gurun. “Sellers in the program are assigned a dedicated Seller Account Manager to provide additional coaching related to their particular needs.”

“First and foremost, the Seller Account Management program is designed for sellers who are aligned with Etsy’s values, and are committed to growing responsibly and transparently on the platform,” she says. “While we have found that the Seller Account Management program tends to be best suited for higher volume sellers, as their basic need for support assistance is much greater, any active seller excited about the opportunity is encouraged to apply. We’re looking forward to hearing from sellers who are ready to utilize this line of support to its fullest advantage and are passionate about developing a relationship with an Etsy expert. As we review applications, we’ll consider the ways a seller envisions using Seller Account Management resources, the amount we think these resources can impact their business, and whether they are in good standing with Etsy.

Here’s the list of things a seller account manager might be able to assist with (per Etsy’s FAQ page):

– Trust & Safety/Marketplace Integrity

– Case review and management

– Issues with reviews

– Issues with non-delivery

– Payments/billing/shipping issues

– Shop critiques

– General support issues

– Education for using Etsy tools and best practices

– Stats, Promoted Listings, tags, etc.

– Providing information about local events and teams

– Proactive support, including the sharing of resources and Help articles that pertain to a seller’s shop

– Fielding of seller feedback to the appropriate internal departments

– Informing sellers of Etsy product prototypes, surveys, or research that might pertain to their shop

– Coaching and guidance for issues that arise as a shop grows. Examples could include: hiring help and scaling sustainably

Etsy has about a million and a half sellers, so obviously the new program is going to be open to a very small percentage. As the company notes, however, many of the same services offered through the program are available through its other channels.

Image via Etsy

August 12, 2015

Fourth Quarter 2015 Financial Summary (in thousands)

	Three Months Ended December 31,						% Growth Y/Y		Year Ended December 31,						% Growth Y/Y
	2014			2015					2014			2015

GMS	$	611,474		$	741,488		21.3	%	$	1,931,981		$	2,388,387		23.6	%
Revenue	$	64,912		$	87,895		35.4	%	$	195,591		$	273,499		39.8	%
Marketplace revenue	$	33,311		$	39,796		19.5	%	$	108,732		$	132,648		22.0	%
Seller Services revenue	$	30,690		$	47,230		53.9	%	$	82,502		$	136,608		65.6	%
Adjusted EBITDA	$	9,298		$	14,049		51.1	%	$	23,081		$	31,007		34.3	%

Active sellers	1,353			1,563			15.5	%	1,353			1,563			15.5	%
Active buyers	19,810			24,046			21.4	%	19,810			24,046			21.4	%
Percent mobile visits	56		%	61		%	500	bps	54		%	60		%	600	bps
Percent mobile GMS	38		%	44		%	600	bps	37		%	43		%	600	bps
Percent international GMS	30.6		%	29.2		%	(140)	bps	30.9		%	29.8		%	(110)	bps

	2016-2018 CAGR Range	2016 Guidance
GMS Growth	13-17%	Mid-point of range
Revenue Growth	20-25%	High end of the range
Gross Margin (by 2018)	Mid 60s (%)	64-65%
Adjusted EBITDA Margin (by 2018)	High teens (%)	10-11%

Etsy, Inc. Condensed Consolidated Balance Sheets (in thousands, unaudited)

	As of December 31, 2014		As of December 31, 2015

ASSETS
Current assets:
Cash and cash equivalents	$	69,659	$	271,244
Short-term investments	19,184		21,620
Accounts receivable, net	15,404		20,275
Prepaid and other current assets	12,241		9,521
Deferred tax charge—current	—		17,132
Funds receivable and seller accounts	10,573		19,262
Total current assets	127,061		359,054
Restricted cash	5,341		5,341
Property and equipment, net	75,538		105,021
Goodwill	30,831		27,752
Intangible assets, net	5,410		2,871
Deferred tax charge—net of current portion	—		51,396
Other assets	2,022		1,626
Total assets	$	246,203	$	553,061
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,231	$	14,382
Accrued expenses	12,852		31,253
Capital lease obligations—current	1,755		5,610
Funds payable and amounts due to sellers	10,573		19,262
Deferred revenue	3,452		4,712
Other current liabilities	4,590		4,903
Total current liabilities	41,453		80,122
Capital lease obligations—net of current portion	3,148		7,571
Warrant liability	1,920		—
Deferred tax liabilities	149		61,420
Facility financing obligation	50,320		51,804
Other liabilities	1,913		21,646
Total liabilities	98,903		222,563
Total convertible preferred stock	80,212		—
Total stockholders’ equity	67,088		330,498
Total liabilities, convertible preferred stock and stockholders’ equity	$	246,203	$	553,061

Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA (in thousands, unaudited)

	Three Months Ended December 31,				Year Ended December 31,
	2014		2015		2014		2015

Net loss	$	(5,358)	$	(4,232)	$	(15,243)	$	(54,063)
Excluding:
Interest and other non-operating expense, net	224		263		549		1,202
Provision for income taxes (1)	3,103		6,340		4,983		26,069
Depreciation and amortization	4,731		4,509		17,223		18,550
Stock-based compensation expense (2)	1,708		2,422		5,920		8,981
Stock-based compensation expense—acquisitions (2)	2,334		(1,298)		4,130		1,860
Net unrealized loss (gain) on warrant and other liabilities	172		(3)		411		3,133
Foreign exchange loss (3)	2,035		6,048		3,049		21,775
Acquisition-related expenses	349		—		2,059		—
Contribution to Etsy.org (4)	—		—		—		3,500
Adjusted EBITDA	$	9,298	$	14,049	$	23,081	$	31,007

Third Quarter 2015 Financial Summary
(in thousands)

	Three Months Ended September 30,		% Growth Y/Y	Nine Months Ended September 30,		% Growth Y/Y
	Three Months Ended September 30,		% Growth Y/Y	Nine Months Ended September 30,		% Growth Y/Y
	2014	2015		2014	2015

GMS	$ 467,202	$ 568,787	21.7%	$ 1,320,507	$ 1,646,899	24.7%
Revenue	$ 47,634	$ 65,696	37.9%	$ 130,679	$ 185,604	42.0%
Marketplace revenue	$ 26,917	$ 32,232	19.7%	$ 75,421	$ 92,852	23.1%
Seller Services revenue	$ 19,392	$ 32,329	66.7%	$ 51,812	$ 89,378	72.5%
Adjusted EBITDA	$ 4,248	$ 6,224	46.5%	$ 13,783	$ 16,958	23.0%

Active sellers	1,284	1,533	19.4%	1,284	1,533	19.4%
Active buyers	18,102	22,603	24.9%	18,102	22,603	24.9%
Percent mobile visits	55%	60%	500 bps	53%	60%	700 bps
Percent mobile GMS	38%	44%	600 bps	37%	43%	600 bps
Percent international GMS	31.6%	29.3%	(230) bps	31.1%	30.0%	(110) bps

Etsy, Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)

		As of December 31, 2014	As of September 30, 2015



ASSETS
Current assets:
Cash and cash equivalents		$ 69,659	$ 266,283
Short-term investments		19,184	20,474
Accounts receivable, net		15,404	15,976
Prepaid and other current assets		12,241	8,773
Deferred tax assets—current		2,932	3,134
Deferred tax charge—current		—	17,605
Funds receivable and seller accounts		10,573	17,069
	Total current assets	129,993	349,314
Restricted cash		5,341	5,341
Property and equipment, net		75,538	94,655
Goodwill		30,831	28,366
Intangible assets, net		5,410	3,483
Deferred tax charge—net of current portion		—	55,711
Other assets		2,022	1,751
	Total assets	$ 249,135	$ 538,621
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$ 8,231	$ 3,200
Accrued expenses		12,852	32,861
Capital lease obligations—current		1,755	4,431
Funds payable and amounts due to sellers		10,573	17,069
Deferred revenue		3,452	4,128
Other current liabilities		4,590	7,925
	Total current liabilities	41,453	69,614
Capital lease obligations—net of current portion		3,148	6,483
Warrant liability		1,920	—
Deferred tax liabilities		3,081	66,227
Facility financing obligation		50,320	51,804
Other liabilities		1,913	21,699
	Total liabilities	101,835	215,827
	Total convertible preferred stock	80,212	—
	Total stockholders’ equity	67,088	322,794
	Total liabilities, convertible preferred stock and stockholders’ equity	$ 249,135	$ 538,621

Etsy, Inc.
Condensed Consolidated Statements of Operations
(in thousands except share and per share data, unaudited)

			Three Months Ended September 30,		Nine Months Ended September 30,
			Three Months Ended September 30,		Nine Months Ended September 30,
			2014	2015	2014	2015

Revenue			$ 47,634	$ 65,696	$ 130,679	$ 185,604
Cost of revenue			18,115	24,165	50,854	66,783
Gross profit			29,519	41,531	79,825	118,821
Operating expenses:
	Marketing		8,808	16,542	25,042	44,295
	Product development		10,077	11,406	26,911	31,487
	General and administrative		13,686	15,250	34,299	53,339
		Total operating expenses	32,571	43,198	86,252	129,121
Loss from operations			(3,052)	(1,667)	(6,427)	(10,300)
Total other expense			(1,144)	(1,129)	(1,578)	(19,802)
Loss before income taxes			(4,196)	(2,796)	(8,005)	(30,102)
Provision for income taxes			(2,075)	(4,095)	(1,880)	(19,729)
Net loss			$ (6,271)	$ (6,891)	$ (9,885)	$ (49,831)
Net loss per share—basic and diluted			$ (0.15)	$ (0.06)	$ (0.25)	$ (0.59)
Weighted average shares outstanding—basic and diluted			43,015,151	111,329,917	39,258,879	84,195,227

Etsy, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)

			Nine Months Ended September 30,
			Nine Months Ended September 30,
			2014	2015

Cash flows from operating activities
Net loss			$ (9,885)	$ (49,831)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Stock-based compensation expense		4,212	6,559
	Stock-based compensation expense-acquisitions		1,796	3,158
	Contribution of stock to Etsy.org		—	3,200
	Depreciation and amortization expense		12,492	14,041
	Bad debt expense		1,037	1,473
	Foreign exchange loss		1,014	15,727
	Amortization of debt issuance costs		40	122
	Net unrealized loss on warrant and other liabilities		239	3,136
	Loss on disposal of assets		76	476
	Amortization of deferred tax charges		—	15,093
	Excess tax benefit from exercise of stock options		(716)	(2,472)
	Changes in operating assets and liabilities, net of acquisitions		1,681	8,325
		Net cash provided by operating activities	11,986	19,007
Cash flows from investing activities
	Acquisition of businesses, net of cash acquired		(4,688)	—
	Purchases of property and equipment		(881)	(9,524)
	Development of internal-use software		(6,019)	(7,329)
	Purchase of U.S. Government and agency bills		(17,209)	(18,552)
	Sale of marketable securities		16,846	17,270
	Net increase in restricted cash		(5,341)	—
		Net cash used in investing activities	(17,292)	(18,135)
Cash flows from financing activities
	Proceeds from public offering		—	199,467
	Proceeds from the issuance of common stock		35,000	—
	Proceeds from exercise of stock options		7,585	2,285
	Excess tax benefit from the exercise of stock options		716	2,472
	Payments on capitalized lease obligations		(1,051)	(2,262)
	Deferred payments on acquisition of business		(75)	—
	Payments relating to public offering		(1,160)	(2,919)
		Net cash provided by financing activities	41,015	199,043
Effect of exchange rate changes on cash			(1,305)	(3,291)
Net increase in cash and cash equivalents			34,404	196,624
Cash and cash equivalents at beginning of period			36,795	69,659
Cash and cash equivalents at end of period			$ 71,199	$ 266,283

Tag: etsy

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