Etsy’s welcome to the world of publicly trader companies has been a bit of roller coaster, and it didn’t get any easier earlier this week, when the online marketplace missed earnings expectations, sending shares down close to 18 percent on Tuesday (May 19).
Despite having a gross profit of $37.8 million, Etsy still posted a net loss of $36.6 million for its first quarter earnings. Etsy also posted $58.5 million in revenue, which was a 44 percent growth from the same period the year prior. That’s quite a stark difference compared to 2014’s net loss of $463,000.
To help offset this loss, Etsy’s executive team said it plans to increase hiring and marketing efforts to flip its business around. Despite the earnings blow in the company’s first earnings report, Etsy CEO Chad Dickerson focused the company’s earnings release on how Etsy can build as a company now that it’s publicly traded.
He also focused on Etsy’s growing active sellers and buyers.
“Our recent IPO is a milestone in our mission to reimagine commerce in ways that build a more fulfilling and lasting world,” Dickerson said. “At the end of the first quarter of 2015, the Etsy community included more than 1.4 million active sellers and 20.8 million active buyers. We made progress down our path to make Etsy an everyday experience, build local marketplaces, globally, offer high-impact seller services, and expand the Etsy economy. We will continue to concentrate on creating long-term value for Etsy and our community, which we believe will result in sustainable long-term returns for our investors.”
And in the earnings call, the CEO focused on how Etsy plans to grows it marketplaces on a global scale in order to help the company reach its overall goal of providing unique, handcrafted goods across the world — while eventually turning around profit for its newfound shareholders.
“We made progress down our path to make Etsy an everyday experience, build local marketplaces, globally, offer high-impact seller services, and expand the Etsy economy,” Dickerson said, according to Mashable.
When Etsy was filing for its IPO in April, analysts were questioning if the $14-$16 a share that valued the company at $1.2 billion was worth it, which leaves the company with a lot to prove as it moves forward in 2015. While Etsy has yet to make a profit, citing its high development costs, it has been able to bring in a steady revenue by charging merchants to both list their goods and sell them.
Luckily for Etsy, it already has some big name backers, as investors include: venture-capital firms Accel Partners, Union Square Ventures, Index Ventures and Tiger Global Management LLC, which collectively own 62 percent of the company. Accel, which invested in Etsy for the first time in 2008, is the largest shareholder, with a 27 percent stake.
But the question is: Will those investors, along with its public investors, stick around to see if Etsy can make a turnaround?
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