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Etsy sales get a boost from increased online shopping in Q2

Shares of Etsy jumped in post-market trading, after hitting a new all-time high during the normal session, following the release of its second-quarter results. The company easily topped analysts’ expectation on both the top and bottom lines, noting that its marketplace saw an influx of 18.7 million new buyers and reactivated buyers - those who haven’t purchased in a year or more. Yahoo Finance’s Jared Blikre breaks down the results on The Final Round.

Video Transcript

SEANA SMITH: I want to get back to Jared Blikre because we have another earnings release here. Etsy is out with their numbers for the quarter, Jared. What do you have?

JARED BLIKRE: Yeah, it looks like a lot of positivity here too. They came in with second quarter EPS at $0.75. That compares to $0.14 over year-- don't have the comparison versus Wall Street estimates just yet. But on revenue, a huge beat. 428.7 million versus 330 million expected. And that's versus 181 million last year, so really a multiple in their prior business.

To Andy's point, another company that, really, you would expect to do well in this COVID era, and it is. Looking at some of the other lines here, gross merchandise sales are 2.69 billion. That's versus estimates of 2.1 billion, so another beat there. And then active sellers and active buyers-- those are also exceeding expectations.

Sellers are up to 3.14 million. And that's over estimates of 3.06 million. And the active buyers are 60.3 million. That's another 4 million tacked on to the estimate of 56 million. That's up 41% year over year. Mobile sales as a percentage of gross merchandise sales-- those are up too, as we head into the direction of mobile versus desktop.

So that came in at 61%. The estimate was for slightly under that at 58.8%. And finally, one metric that may be disappointed is international sales as a percentage of gross merchandise sales is 32% versus 38%. A year ago, the estimate was for 36.8%. So deriving a greater portion of its sales from the domestic market, we know a lot of people were buying masks from Etsy.

As people have other alternatives for things to buy, maybe that ebbs in the third and fourth quarters here. But, overall, a very solid report. Just one final number-- gross margin came in at 74%. And the estimate was for 66.8%. So really on just about every line we're covering here, big beats. And looking at the stock, it's up 4% after market. And on a three-month basis, it's up over 86%-- really incredible.

ANDY SERWER: Yeah, that-- the story. Sorry, Myles. Unlike the story with Roku, this is a company that hadn't done so well in 2019. And, in fact, you know, it sort of was-- you know, wow, it's kind of a Brooklyn thing for a number of years. And it just never really went anywhere. But now it's like, got this incredible COVID renaissance. So 100 points almost exactly this year, Myles.

MYLES UDLAND: Well, and just to that point, Andy, I mean, there are a number of CEOs-- and we can name them-- who have done just incredible jobs in the last five to eight years of stepping into situations and creating a tremendous amount of value for shareholders. Josh Silverman at Etsy-- when he took over the company, it was a $13 stock and some change. You know, they're in the ballpark of $13.

But now, it's a $135 stock. So I think that one's been pretty good for shareholders. And it's really amazing, because, Andy, I know you remember-- we all remember-- when the company went public and there was this notion about like, what is the deal with Etsy? Where's it going to be?

And I think the way that they've really narrowed their focus-- and you can compare it to a company like eBay that I think has kind of floating off in what do they do sort of len, whereas, Etsy, their value proposition is very clear. And I think consumers and investors know what Etsy is about. And that story has certainly been appreciated in spades by investors in the last couple of years.

SEANA SMITH: Yeah, well, it certainly has. I mean, just take a look at the stock price. The shares up over 200%. I believe it's 205% so far this year. So clearly a winner. And, again, they did mention some of the-- some of the moves that they did get from coronavirus. So some of the numbers, they're saying that during the second quarter, Etsy's marketplace on influx of 18.7 million new buyers and reactivated buyers during the quarter. So talking about more people going to their site and then also spending more time on their site as well.