Etsy Inc (NASDAQ: ETSY) stock surged over 10.5% in the pre-market session of Feb 26th, 2021 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 20. On a consolidated basis, Etsy’s fourth quarter GMS grew 118% to $3.6 billion. In Q4, consolidated international GMS increased 500 basis points sequentially to 40% of overall GMS. International GMS was up 140% on a constant currency basis and was driven in part by strong trends in the U.K. and Germany. At the end of December 2020, the company had $1.7 billion in cash, cash equivalents and short-term investments, in addition to a $200 million revolver that is currently undrawn. The company has reported net income for the fourth quarter of 2020 of $148.5 million, up 374.7% year-over-year.
ETSY in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.08, beating the analysts’ estimates for the adjusted earnings per share of 60 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 128.7 percent to $617.36 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue by 17.62%. This is driven by growth in both Marketplace and Services revenue. The company delivered the gross profit of $466.6 million, up 160.4% year-over-year, and gross margin was 75.6%, up 920 basis points compared with 66.4% in the fourth quarter of 2019. The expansion in gross margin was primarily driven by the shift to Offsite Ads, which drives revenue growth without an equal offset in cost of revenue.
Additionally, in Q4, the company had repurchased $78 million of the stock or 618,841 shares at an average price of $125 per share. The company has now completed the November 2018 buyback program, repurchasing approximately $200 million of stock or about three million shares at an average price of $64.80. The company has recently authorized a new $250 million stock repurchase program.
For the first quarter of 2021, the company expects consolidated GMS to be approximately $3 billion, up about 115% to 125% compared to Q1 of last year; revenue is expected to be in the range of $513 million to $536 million, up 125% to 135% versus last year; and adjusted EBITDA is expected to be in the range of $168 million to $178 million with a margin expected to be in the range of 32% to 34%.