What’s behind Etsy’s latest financial results?

In early May, a headline caught my eye regarding a drop in Etsy’s revenue. I’ve also been monitoring a variety of social media platforms, and have watched a number of interesting dialogs and commentaries on individual artisan results recently on Etsy.

While I talk about a number of different artisan platforms as part of Handmade Seller magazine, there are two big reasons I watch to see what Etsy is sharing. 1.They are a large player in the artisan industry and 2.They often talk about what is happening in the broader macroeconomic environment. i.e. what’s happening with the broader economy where you live and how that will affect your business. They have more people watching economic indicators than any of our individual small businesses. Understanding what is being shared about the reality of economic cycles gives you more information with which to make objective business decisions. And you can get all this information without even selling on their platform!

I’ve analyzed Etsy’s most recent earnings release. I’ve also analyzed their most recent 5 years of results to get a better sense of Etsy’s trends. Etsy is a publicly traded company so they file quarterly reports with the SEC in the US and have public investor calls to share their financial results. This will be the first in a series of articles on what is behind Etsy’s financials. To be very clear- this is not a commentary, this is an analysis piece. I am not weighing in on whether any of this is good or bad, I am simply sharing what their data tells us.

Etsy is a complex company. They currently have what they refer to as a “House of Brands”. Etsy, Reverb and Depop. They have sold a Brazilian marketplace called Elo7 (which also makes reading some of the financial reports a little more complex). 

In analyzing the financial results, I focused on several items that I believe artisan business owners would like to understand:

1. What are the gross merchandise sales on the marketplace?

2. What are the revenue sources- how much is fees on products sold versus services (listing fees, advertising, etc).

3. How many active sellers are on Etsy?

4. How many active buyers are on Etsy?

The data provided tells us an interesting story about how Etsy is evolving as a platform. I’ve also created some of my own simple graphics to compile information from their financial reports.