Etsy’s sales grow 19% in Q3
November 2, 2016 01:08 PM
Sales on Etsy Inc., the operator of an online marketplace for handcrafted goods, grew 19.1% in the third quarter ended Sept. 30 compared with the same period a year ago.
Etsy on Tuesday reported gross merchandise sales, or the total value of goods transacted on the marketplace, of $677.2 million in Q3, up from $568.8 million in Q3 2015. Not including the impact of currency exchange rates, Etsy says gross merchandise sales increased 20.1%.
Etsy’s total revenue, which it receives from listing fees, seller services and commissions on sales, grew 33.3% to $87.6 million in Q3 compared with $65.7 million a year ago. To break it down further, revenue from services Etsy offers to its sellers grew 50.1% to $48.5 million in the quarter.
Etsy narrowed its net loss to $2.4 million in Q3 compared with a $6.9 million loss a year ago. Etsy has reported a net loss for 10 of the past 11 quarters since Etsy became a publicly traded company. Etsy launched in 2005 and went public in April 2015, providing 2014 figures in its 2015 reports.
Mobile growth remains strong for Etsy, as both visits and sales from mobile devices grew in the quarter. Nearly half (49%) of gross merchandise sales were from mobile devices compared with 44% a year earlier. The percent of total visits stemming from mobile devices was 65% in Q3, compared with 60% in the same period a year ago.
Etsy ended the quarter with 1.7 million active sellers, up 13.3% from 1.5 million a year ago, and 27.140 million active buyers, an increase of 20.1% from 22.603 million. Active buyers are those who have bought on Etsy at least once in the past 12 months.
During the quarter, Etsy acquired machine learning company Blackbird Technologies. Etsy says Blackbird’s technology, which combines image recognition and natural language processing using artificial intelligence, will help Etsy improve the quality and relevance of search of the more than 40 million items listed on Etsy.com.
Additionally, Etsy in October rolled out a new advertising dashboard through which sellers on Etsy can launch Google Shopping campaigns. The service gives sellers access to a major digital marketing service without making the upfront investment in time and money that is typically required for developing digital marketing programs.
“Before we offered this tool, launching a digital ad campaign was difficult and time consuming for our sellers often taking weeks to set up and then requiring daily maintenance,” CEO Chad Dickerson said on the call, according to a SeekingAlpha transcript. Sellers set a daily budget from their Etsy accounts, and Etsy manages and optimizes the rest, Dickerson says.
In the third quarter ended Sept. 30, Etsy also reported:
- Revenue of $87.6 million, up 33.3% from $65.7 million a year ago.
- Marketplace revenue of $38.1 million, up 18.3% from $32.2 million.
- Seller services revenue of $48.5 million, up 50.1% from $32.3 million.
- Percent of international gross merchandise sales was 30.4% in Q3 compared with 29.3% a year ago.
- Net loss of $2.4 million compared with a net loss of $6.9 million.
For the nine months ended Sept. 30, Etsy reports:
- Gross merchandise sales of $1.98 billion, up 20.0% from $1.65 billion in the same period in 2015.
- Revenue of $254.8 million, up 37.3% from $185.6 million.
- Marketplace revenue of $111.27 million, up 19.8% from $92.9 million.
- Seller services revenue of $139.1 million, up 55.6% from $89.4 million.
- Net loss of $8.5 million compared with a loss of $49.8 million.