Mobile transactions account for 44% of Etsy’s Q3 gross sales

November 5, 2015 07:00 AM

Sales on Etsy Inc., the operator of an online marketplace for crafty goods, grew nearly 22% in Q3, driven by 25% increase in the number of consumers shopping the site versus a year ago. The percentage of consumers using mobile device to access Etsy listings also increased.

Etsy says 60% of visitors in Q3 used mobile to access the site, up from 55% a year earlier. Mobile transactions also accounted for 44% of gross merchandise sales, up from 38% a year earlier. “We narrowed the gap between mobile visits and GMS more than we have in any single quarter in our history,” Etsy CEO Chad Dickerson said in a call discussing the results. “We also continue to grow our mobile app downloads, which increased to more than 30 million this quarter.” That app launched in November 2011.

Etsy is No. 24 in the Internet Retailer 2015 Top 500 Guide.

The online marketplace also noted that 90% of its gross merchandise sales comes from traffic arriving at the marketplace organically. It says it spent $10 million on paid marketing—or 1.76% of gross merchandise sales—on a mix of paid search, Google Product Listing Ads and affiliate marketing in the third quarter.

Revenue streams also shifted in the quarter. Revenue derived from what Etsy calls Seller Services grew the most year over year and now accounts for slightly more than the revenue Etsy generates from seller fees and commissions on sales. Seller Services include Etsy’s shipping label and direct checkout program, and Promoted Listings, the paid search ads marketplace sellers can buy to have their products appear high in search results on and within the Etsy mobile app. The segment contributed $32.3 million to Q3 revenue, or 49.2% of Etsy revenue, up 66.5% from a year earlier, when it accounted for about 40.7% of quarterly revenue. Etsy attributes the leap in Seller Services revenue primarily to the revenue from Promoted Listings. Etsy executives say they expect more sellers to use the direct checkout program as well, due to enhancements rolled out during the quarter, including a full integration with PayPal.

For the third quarter ended Sept. 30, Etsy reported:

  • Gross merchandise sales of $568.8 million, up 21.7% from $467.2 million in the same quarter last year. Without the impact of currency fluctuations, mainly the stronger U.S. dollar, Etsy says gross merchandise sales would have increased 23.5% year over year.
  • Revenue increased 38.0% to $65.7 million from $47.6 million.
  • Active sellers increased 19.4% to 1.533 million from 1.284 million.
  • Active buyers increased 24.9% to 22.603 million from 18.102 million.
  • EBITDA (earnings before interest, taxes, depreciation and amortization) of $6.2 million, a 47.6% increase from $4.2 million.
  • A net loss of $6.9 million, up 9.5% from $6.3 million in the same quarter a year earlier.

For the first nine months of 2015, Etsy reported:

  • Gross merchandise sales increased 25.0% to $1.65 billion from $1.32 billion.
  • Revenue of $185.6 million, an increase of 42.0% from $130.7 million.
  • EBITDA of $16.96 million, up 22.9% from $13.80 million.
  • A net loss of $49.8 million compared with a loss of $9.9 million in the first nine months of 2014. Etsy took large accounting charges early in the fiscal year to support international expansion.
  • International sales accounted for 30.0% of gross merchandise sales. Etsy says it expects international sales eventually will account for 50% of gross merchandise sales. Its largest and fastest-growing international market is the United Kingdom, the company says.





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