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Etsy Q4 2024 Earnings: EPS Surprise Amid Mixed Revenue Results

Etsy's fourth quarter 2024 earnings reveal mixed results, with revenue slightly below expectations but EPS exceeding forecasts. The company's net income grew significantly, indicating potential resilience despite challenges in consumer spending.

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AI Rating:   6

Earnings Performance Highlights
In analyzing Etsy's fourth quarter performance for 2024, several financial metrics reveal a mixed outcome. The reported EPS of $1.03 is a positive surprise compared to the analyst consensus of $0.93. This marks a significant year-over-year increase of 66%, aligning with strong earnings growth.

However, revenue reported at $852.2 million shows only a modest increase of 1.2% year over year, falling short of analyst expectations of $861.8 million. This divergence between EPS and revenue can indicate operational efficiency or successful cost control amid slightly declining sales.

Net Income Growth
Etsy's net income for the quarter amounted to $129.9 million, which represents an impressive 56% increase from $83.3 million in Q4 2023. This substantial growth in net income is attributed to a leaner cost structure, suggesting that the company managed to reduce its operating expenses effectively.

Adjusted EBITDA
The adjusted EBITDA reached a historical high of $250.6 million, cementing a strong margin of 29.4%. This performance indicates that profitability metrics are trending positively, granting potential confidence to investors about earnings quality.

Active Buyer and Seller Metrics
Despite the impressive financial numbers, a decline in active buyers (2.6%) and a more significant drop in active sellers (10%) could signal adverse effects of decreased consumer spending on the platform. However, the re-engagement of 9.8 million lapsed buyers suggests active customer retention efforts, which might mitigate future impacts on revenue.

Forward Guidance
Looking ahead into the first quarter of 2025, Etsy expects continued challenges, forecasting revenue declines similar to the prior quarter. The anticipated adjusted EBITDA margin between 25% and 26% indicates ongoing efforts to maintain profitability under pressure.

In summary, while there are areas of concern, particularly regarding revenue growth and active user engagement, the substantial growth in EPS and net income showcases Etsy's capacity to adjust operational efficiencies. These elements may provoke varied investor reactions, influencing stock price movements in the upcoming financial quarters.

Stocks:  ETSY