Etsy (NASDAQ: ETSY) reported Q3 EPS of ($0.06), in-line with the analyst estimate of ($0.06). Revenue for the quarter came in at $65.7 million versus the consensus estimate of $66.17 million.

"During the third quarter the growth in the Etsy Economy continued, and we generated more than $1.6 billion in GMS year-to-date and supported more than 1.5 million active sellers and 22.6 million active buyers," said Chad Dickerson, Etsy, Inc. CEO and Chairman. "We are looking forward to a great holiday season and are continuing to innovate and build new products and services on our platform that empower Etsy's creative entrepreneurs to succeed on their own terms. Our commitment to reimagining commerce, our understanding of the needs of artisans and our dedication to our vibrant community will continue to differentiate the Etsy marketplace from all others."

Fourth Quarter 2015 Outlook: Factors to Consider

We'd like to highlight a few factors that we believe will impact Etsy's fourth quarter 2015 results.

• First, from an overall business perspective, we're excited about our competitive position as we head into the fourth quarter - our biggest quarter of the year - and the holiday season. We have launched a holiday campaign that we believe is our strongest holiday effort to date.
• Even so, just as we conveyed in the first and second quarters of 2015, if currency exchange rates remain at current levels, then currency translation will continue to negatively affect reported GMS growth for goods that are not listed in U.S. dollars and will also continue to dampen the demand for U.S. dollar-denominated goods from buyers outside of the United States.
• The second qualitative factor we'd like to highlight is that from a modeling perspective, the operating leverage that we achieved in the third quarter will not repeat in the fourth quarter for a few reasons:
• First, although Etsy's gross margin has expanded year-over-year during each of the first three quarters of 2015, we do not expect that to continue in the fourth quarter for two reasons. The first is that the fourth quarter of 2015, as we have discussed previously, will be the first full quarter following the anniversary of the re-launch of Promoted Listings. We expect the year-over-year revenue growth rate for Promoted Listings to decelerate significantly compared with the first three quarters of 2015 to a level that is below that of Direct Checkout, which is a lower-margin revenue stream. The second reason is that we expect Direct Checkout to benefit from our recent integration of PayPal. This shift in Seller Services revenue growth drivers is expected to be a drag on our gross margin.
• Second, as in the first three quarters of the year, we plan to spend more on marketing in absolute dollars in the fourth quarter compared with both the third quarter of 2015 and the fourth quarter of 2014. Therefore, we expect marketing expenses to continue to grow faster than our revenue in the fourth quarter. Despite this, we expect the year-over-year growth rates for overall marketing expenses to decelerate in the fourth quarter compared with both the third quarter of 2015 and the fourth quarter of 2014. We also expect digital marketing expenses to grow more slowly year-over-year in the fourth quarter of 2015 compared to year-over-year growth in the third quarter of 2015.
• Finally, we expect our number of net hires in the fourth quarter of 2015 to be comparable to the third quarter of 2015 but to be higher than the fourth quarter of 2014.

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