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Etsy (ETSY) Reports Q1 Loss of $0.84/Share

May 19, 2015 4:04 PM EDT

Etsy (NASDAQ: ETSY) reported Q1 EPS of ($0.84), versus ($0.01) reported last year. Revenue for the quarter came in at $58.54 million, versus $40.54 million reported last year.

Etsy's net loss increased as a result of non-cash, non-operating expenses related to the updated global corporate structure that we implemented on January 1, 2015. These expenses include a non-cash $10.5 million increase to Etsy's tax provision, which brings Etsy's total tax provision to $10.7 million. These expenses also include a non-cash currency exchange loss of $20.9 million largely due to intercompany debt incurred related to the structure. Etsy's revised corporate structure was implemented to more closely align with its global operations and future expansion plans outside the U.S.

Adjusted EBITDA was $6.7 million, from $6.1 million in Q114.

GMS was $531.9 million, up 28.2% compared with the first quarter of 2014. Growth in GMS was driven by 25.8% year-over-year growth in active sellers and 36.5% year-over-year growth in active buyers. Mobile visits continued to grow faster than desktop visits and we made progress in narrowing the gap between mobile visits and mobile GMS as a result of improvements in our mobile app offerings for Etsy buyers. Percent mobile visits was 57.7%, up 750 bps compared with 50.2% in the first quarter of 2014 and the percent mobile GMS was 41.4%, up 620 bps compared with 35.2% in the first quarter of 2014.

Second Quarter 2015 Outlook: Factors to Consider

We'd like to highlight a few factors that we believe will impact Etsy's second quarter 2015 results. First, if foreign exchange rates continue at current levels, it will likely continue to impact buyer behavior outside of the U.S. Second, we expect to increase the pace of hiring in the second quarter compared with both the first quarter of 2015 and second quarter of 2014. Third, we plan to spend more on marketing in absolute dollars in the second quarter compared with both the first quarter of 2015 and the second quarter of 2014. Finally, we would like to remind investors that second quarter 2015 results will include some one-time expenses such as Etsy's $300,000 cash contribution to Etsy.org described in the Etsy prospectus filed on April 16, 2015 and approximately $300,000 in IPO expenses not deductible from Etsy's IPO proceeds.

For earnings history and earnings-related data on Etsy (ETSY) click here.



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