Etsy, Inc. has recently released its 10-K report, providing a comprehensive overview of its business and financial performance. Etsy operates online marketplaces connecting buyers and sellers globally, including its primary marketplace, Etsy.com, as well as Reverb, Depop, and Elo7. As of December 31, 2023, Etsy connected a total of 9.0 million active sellers to 96.5 million active buyers, generating $13.2 billion in Gross Merchandise Sales (GMS), with 68% of the sales coming from purchases made on mobile devices. The company's total revenue for the year ended December 31, 2023, was $2.7 billion, with net income of $307.6 million.
In terms of financial highlights, Etsy's revenue increased by 7.1% compared to the previous year, driven by growth in both services and marketplace revenue. The company recorded a net income of $307.6 million, despite incurring an impairment charge of $68.1 million related to the property and equipment and intangible assets of Elo7, and restructuring and other exit costs of $26.6 million. Additionally, Etsy's non-GAAP Adjusted EBITDA for the year ended December 31, 2023, was $754.3 million.
Etsy's active seller base grew by 21.0% to 9.0 million, while active buyers increased by 1.5% to 96.5 million in the year ended December 31, 2023. Notably, approximately 45% of Etsy's GMS in 2023 came from transactions involving either a seller or a buyer located outside of the United States.
In response to macroeconomic headwinds, Etsy experienced a decline of 1.2% in GMS compared to the previous year. This decline was primarily driven by a decrease in Etsy marketplace GMS, partially offset by an increase in GMS for the Depop marketplace. The company attributed this decline to factors such as consumer discretionary spending pressures, high inflation, and a competitive retail environment.
Etsy also undertook strategic initiatives during the year, including a restructuring plan aimed at increasing operational efficiencies and reducing operating costs. The plan involved an approximately 11% reduction in the Etsy marketplace workforce, comprising approximately 225 employees, with charges of $26.6 million related to restructuring and other exit costs incurred in the fourth quarter of 2023.
Furthermore, Etsy completed the sale of Elo7 to Enjoei S.A. on August 10, 2023, recognizing a net loss of $2.6 million from the sale. The company's consolidated financial results for the year ended December 31, 2023, included the results of Elo7 until the date of sale.
Today the company's shares have moved -6.9% to a price of $71.77. For more information, read the company's full 10-K submission here.
