Etsy beat investor expectations on both top and bottom lines in its third quarter earnings report, released after hours on Wednesday. Although the company posted higher Q3 profit thanks to a boost in online shopping, expects a possible deceleration, particularly on its revenue. Yahoo Finance’s Emily McCormick breaks down the company’s earnings report on The Final Round.
Video Transcript
SEANA SMITH: Well, the numbers keep rolling in, Etsy is also out with its earnings report. We know that this stock has been a real outperformer so far this year with shares up just over 200% since January 1. But Emily McCormick has those numbers for us. And Emily, it looks like shares under a little bit of pressure, off just over 1%.
EMILY MCCORMICK: That’s right, Seana. Taking a look at these results, we did get a beat on every major metric here for Etsy in its fiscal third quarter. But taking a look at that guidance, it is showing that it is seeing a potential deceleration here, especially on the top line. Now, just to reiterate what we saw for the third quarter, we had the company reporting GAAP earnings of $0.70 a share. That was better than the $0.60 expected and well above the $0.12 per share reported in the same period last year.
And we also saw revenue of 451.5 million, well above the $413 million that had been expected. And this was the second straight quarter that we saw Etsy actually post revenue that grew at more than 100% over last year. Now, again, taking a look at that guidance, a bit of a disappointment here, especially since the company said even on the high end, its revenue will come in at about 90% of an increase over last year, coming in at as much as $513 million for that fiscal fourth quarter.
So potentially showing signs here of a little bit of really a pullback, when we think about the surge in demand that the e-commerce site has had during the early innings here of this pandemic. Now, a couple other key metrics from the third quarter results. We had gross merchandise sales at $2.6 billion, also better than the 2.4 billion expected.
Active sellers also a beat here at about 3.7 million, above the 3.3 million anticipated. But again, that guidance here really what the Street is focusing and why we’re seeing those shares under pressure, Seana.
SEANA SMITH: All right. Emily, thanks so much. Of course, that was the big question going into Etsy’s results, whether or not they would be able to maintain some of that momentum. So that, of course, weighing on shares a little bit here after hours.
