Business

Etsy shares surge as revenue hits $200m

Etsy at the Nasdaq exchange Image copyright Getty Images

Shares in online crafts marketplace Etsy jumped by 6% in after-hours trading, after the firm reported strong growth during the festive season.

The retailer's revenues hit about $200m (£153m) in the last three months of 2018, up 47% year-on-year.

Buyers using the platform were up 18%, while active sellers increased by 9%.

The gains cap Etsy's strongest year of revenue growth since 2015, when it debuted on the stock exchange, and come despite competition from Amazon.

Etsy chief executive Josh Silverman said executives believe the firm's 2018 expansion outpaced the overall e-commerce market. "We are gaining share," he said.

The numbers

Etsy's future once looked like it might be threatened by bigger players, especially Amazon.

In 2017, Etsy replaced its chief executive and announced several rounds of job cuts, as losses mounted and Amazon launched a division focused on handmade gifts.

However, the firm's share price has almost tripled in the last 12 months, as investors brighten on the firm's prospects.

Etsy said about $4b worth of merchandise was sold on Etsy in 2018, up more than 20% from the prior year.

Growth was especially strong internationally, with sales in the UK hitting record levels during the fourth quarter.

The increased activity generated about $600m in revenue for Etsy in 2018, up more than 36%-year-on-year.

However the gains came at a cost.

Full-year profits slipped 5% to about $77.5m, as the firm spent more on marketing and product development, improving its search function and offering free shipping on more products.

Etsy said its expected growth to continue in 2019, with revenue gains of 29% to 32%. It expects merchandise sales to rise 17% to 20%.

The e-commerce site's share price has increased over the last 12 months from about $21 to about $59 as of Monday's market close, before the firm's results.

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