Etsy, Inc. (NASDAQ:ETSY) Q4 2019 Earnings Conference Call - Final Transcript

Feb 26, 2020 • 05:00 pm ET


Etsy, Inc. (NASDAQ:ETSY) Q4 2019 Earnings Conference Call - Final Transcript


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Good afternoon. My name is Cheryl, and I will be your conference operator today. At this time, I would like to welcome everyone to the Etsy Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions] After the speaker's remarks, there will be a question-and-answer session.

[Operator Instructions] I would now like to turn the call over to Deb Wasser, Vice President of Investor Relations. You may begin your conference.

Debra Wasser

Thank you. Good afternoon, and welcome to Etsy's Fourth Quarter and Full year 2019 Earnings Conference Call. Joining me today are Josh Silverman, CEO; Rachel Glaser, CFO; and Gabe Ratcliff, our Senior Manager of Investor Relations. Before we get started, just a reminder that our remarks today include forward-looking statements relating to our financial guidance and key drivers thereof, anticipated product launches, our ability to bring buyers back to the Etsy marketplace, anticipated continued benefits of our migration to the cloud, anticipated benefit of our marketing strategy, anticipated investments in the timing and benefits of our seller initiatives and the strategic benefit and impact on our financial performance of our acquisition of Reverb. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties, which are described in our press release, our 10-Q filed with the SEC on October 31, 2019, and our 2019 10-K that we expect to file with the SEC in the coming days. Any forward-looking statements that we make on this call are based on our beliefs and assumptions today, and we don't have any obligation to update them. Also during the call, we'll present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which you can find on our Investor Relations website. The length of the replay of this call will also be available there, and if you prefer to access the replay via phone, you can find that information in the press release as well. We've created a slide presentation to accompany today's remarks and recommend you follow along.

With that, I'll turn the call over to Josh.

Joshua Silverman

Thanks, Deb, and good afternoon, everyone. We believe Etsy is uniquely positioned to address a huge market opportunity. Last March, we described that opportunity and laid out our long-term strategy to capitalize on it, underpinned by our marketing, product and technology road map, which deepened our powerful rights to win, giving us the confidence to sign up to ambitious growth targets through 2023. We're off to a really strong start with our 2019 performance. At our Investor Day last March, we targeted a 5-year GMS growth CAGR of 16% to 20%, faster than e-commerce averages. And in the first year, our core Etsy marketplace delivered GMS growth of 20.4%, above the high end of the targeted range. We also said we expect revenue to grow slightly faster than GMS over that five-year period, and in 2019, the core Etsy marketplace delivered revenue growth of 32%, significantly higher than GMS. Last August, we also completed the acquisition of