Etsy Inc (NASDAQ: ETSY) stock rose over 14.7% on 26th feb, 2019 (as of 11:03 am GMT-5; Source: Google finance) after the company posted better than expected results for the fourth quarter of 2018. Gross profit for the fourth quarter of 2018 was $142.9 million, up 55.3% year-over-year, and gross margin was 71.4%, up 390 basis points compared with 67.5% in the fourth quarter of 2017. Non-GAAP Adjusted EBITDA for the fourth quarter of 2018 was $51.4 million and grew 47.5% year-over-year. Non-GAAP Adjusted EBITDA margin was 25.7% in the fourth quarter of 2018, up 10 basis points year-over-year. Adjusted EBITDA performance was driven primarily by revenue growth related to changes in the company’s pricing model. Cash, cash equivalents, and short-term investments were $624.3 million as of December 31, 2018.
ETSY in the fourth quarter of FY 18 has reported the adjusted earnings per share of 32 cents, beating the analysts’ estimates for the adjusted earnings per share of 20 cents. The company had reported the adjusted revenue growth of 46.8 percent to $200 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $194.9 million. The revenue growth is bolstered by surging marketplace revenue. Services revenue, though growing at a slower rate, still posted a 42 percent year-over-year gain. GMS from Thanksgiving through Cyber Monday, the five key shopping days, was up 30% compared to the same period last year, driven primarily by product launches, marketing, and improved landing page experiences. The number of active sellers at the end of the fourth quarter was up almost 10 percent from the end of 2017, and the number of active buyers was up almost 20 percent. GMS from paid channels was 20% of overall GMS in the fourth quarter of 2018, expanding 400 bps year-over-year, and up 55% compared to the fourth quarter of 2017.
Moreover, in the fourth quarter of 2018, the total operating expenses were $113.4 million, which is up 53.8% year-over-year. The increase in operating expenses was driven primarily by digital marketing focused on driving GMS growth, and additional expense in connection with certain employee departures, including stock-based compensation expense, impacting product development.
For the first quarter, analysts estimate earnings of 13 cents a share on revenue of $170.2 million. The company expects full-year revenue in 2019 of $779 million to $797 million; Wall Street analysts expect $776.2 million.
Additionally, Etsy had repurchased an aggregate of approximately $45 million, or 916,083 shares of its common stock in the fourth quarter of 2018.