Quirky vintage, retro and handmade online marketplace Etsy, based in Brooklyn, NYC has surprised Wall Street by posting an unexpected profit in the second quarter of 2017.
The marketplace has been under pressure in recent months because it has been underperforming on analysts’ expectations. These recent results give hope: Q217 net income clocked in at 10 US cents a share, that’s a total of $11.7 million. A year ago saw a net loss of 6 cents a share totalling $7.3 million. Revenue was $101.7 million in the second quarter and that’s up 19% for the same period last year. Wall Street was apparently expecting a loss of 2 cents a share on a revenue of $101.1 million in Q2.
The shares have climbed since posting these encouraging results. And other metrics look good too. Etsy had a little over 30 million active buyers in Q217, up from 26 million in 2016.
The recently appointed Etsy CEO Josh Silverman says of the results: “Since May, we have sharpened our focus and increased the velocity of product experiments and launches, which together, we believe will enable us to accelerate GMS growth in the third quarter compared to the second quarter. We are doubling down on our core Etsy.com market and, while it’s still early, the initiatives we have underway are already having a positive impact on GMS.”
Since Silverman, previously of eBay, became the CEO of Etsy in May they have undertaken a number of changes that are intended to improve profitability. A significant number of redundancies have taken place from the workforce that are expected to cut costs over the longer term.
And there have also been a number of tests to the search functionality that are clearly hoped to help buyers find what they want to buy and improve conversions. We wrote about that here: Etsy is testing new search features to help buyers.
It’s clearly too early to say whether the Silverman regime is a turning point for Etsy but these are certainly encouraging initial results.