Big, Pricey Changes Fuel Etsy Growth

Shopping online is hitting it big, and e-commerce platform Etsy (NASDAQ: ETSY) is finally positioned to take advantage of the wave. Prior to a massive restructuring in 2017, the company was falling deeper and deeper into the red, pressured by ballooning costs and big-name competitors like Amazon (NASDAQ: AMZN) and eBay (NASDAQ: EBAY). However, sweeping changes whirled through the company in the past three years. Put to the test by recent economic winds, Etsy is proving it truly does have what it takes to thrive -- at a price.

Indeed, FY20 Q1 results seem to have demonstrated that CEO Josh Silverman has made the right call: Etsy quickly climbed into positive territory after his appointment and has exhibited incredible resilience in the face of changing times.

Total revenue was $228.1 million for the first quarter, up 34.7% year over year. Gross profit was $145.6 million, up 24.8% year over year, while gross margin was 63.9%, down compared with 68.9% in the first quarter of 2019. Etsy explained this decrease in gross margin as a result of the company's recent acquisition of musical instrument marketplace Reverb, as well as its ad platform, Etsy Ads, which drives revenue growth but carries an equal offset in costs.

Source Fool.com