Financial Guidance and Outlook
GMS for Q4 2023 is currently estimated to decline in the low-single-digit range on a year-over-year basis. However, if trends worsen, that could become a mid-single-digit decline, and if trends improve GMS could be flat or even up slightly year-over-year.
We estimate Q4 2023 take rate to be approximately 20.8%, down slightly on a sequential basis due to normal seasonality. This can be used to estimate revenue range for the quarter.
Adjusted EBITDA margin for Q4 2023 is currently estimated to be between 26-27%.
Please note that our guidance assumes currency exchange rates remain unchanged at current levels.
With respect to our expectations under “Financial Guidance and Outlook” above, reconciliation of Adjusted EBITDA margin guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity, and low visibility with respect to the charges excluded from Adjusted EBITDA; in particular, stock-based compensation expense, foreign exchange gain, acquisition and divestiture related expenses; and other non-recurring expenses can have unpredictable fluctuations based on unforeseen activity that is out of our control and/or cannot reasonably be predicted.
Regarding the company’s outlook, Mr. Silverman commented, “There’s no doubt that this is an incredibly challenging environment for spending on consumer discretionary items. It’s therefore important to acknowledge that this volatile macro climate will make it challenging for us to grow this quarter. While there are many things we can’t control, there is still a lot we can — so we are obsessively focused on those. All of us at Etsy feel a great responsibility to deliver profitable growth — growth for our millions of sellers, for our shareholders, and all of our stakeholders. Our team is working passionately and with the highest level of urgency; and I’m more excited about the current roadmap and the progress we’ve made this year, than at any time in my tenure. We are confident we are working on areas that will positively impact Etsy in the months and years ahead. We are keeping our eye on the prize and look forward to getting back to strong growth again as we move through this cycle.”
