Etsy Inc. (NASDAQ:ETSY)

Current Income Tax Expense

The current income tax expense exhibits significant fluctuations over the five-year period. Starting with a negative expense of -5,842 thousand USD in 2017, it turned positive to 731 thousand USD in 2018, indicating a shift from a tax benefit to a tax expense. In 2019, the figure reverted to a negative value of -2,562 thousand USD, suggesting another tax benefit. Subsequently, the value sharply increased to 14,262 thousand USD in 2020 and further to 67,099 thousand USD in 2021, reflecting a substantial rise in current tax liabilities during the latter years.

Deferred Income Tax Expense

The deferred income tax expense has shown a general trend of large negative values, particularly from 2017 through 2019, where it decreased from -43,693 thousand USD in 2017 to -12,686 thousand USD in 2019, indicating a progressively smaller deferred tax benefit. An exception occurred in 2020 when the deferred tax expense became positive at 2,201 thousand USD, marking a deferred tax liability for that year. However, in 2021, it sharply declined again to a significant negative amount of -88,952 thousand USD, representing a considerable deferred tax benefit.

Overall Income Tax Provision (Benefit)

The total income tax provision, which sums current and deferred components, aligns with the observed movements in its constituents. It starts from a substantial tax benefit of -49,535 thousand USD in 2017, reduces in magnitude to -22,413 and -15,248 thousand USD in 2018 and 2019 respectively, signaling a reduction in overall tax benefits. In 2020, the provision flips to a positive expense of 16,463 thousand USD, consistent with the positive current and deferred expenses that year. The trend reverses again in 2021 with a total tax benefit of -21,853 thousand USD, heavily influenced by the large deferred tax benefit recorded.

Summary of Trends

Overall, the data reveal volatile tax expense patterns, with current taxes transitioning from benefits to substantial expenses in the most recent years, while deferred taxes mostly represent benefits except for the brief positive figure in 2020. The total tax provision mirrors these fluctuations, signifying that both current and deferred tax components contribute materially and variably to the annual income tax expense. The pronounced deferred tax benefit in 2021 is a notable feature, indicating potential changes in deferred tax assets or liabilities impacting the tax provision significantly.

U.S. Federal Statutory Income Tax Rate

The statutory tax rate experienced a significant decrease from 35% in 2017 to 21% starting in 2018 and remained stable at 21% through 2021. This reflects a structural change in the tax framework affecting the company beginning in 2018.

Effective Income Tax Rate

The effective income tax rate showed substantial volatility over the five-year period. In 2017, it was deeply negative at -153.53%, indicating significant tax benefits or losses relative to income. The rate remained negative in 2018 (-40.69%) and 2019 (-18.91%), although the magnitude of the negative rate decreased over time, suggesting a reduction in tax benefits or losses. In 2020, the effective tax rate sharply improved to a positive 4.5%, indicating a shift toward a more typical tax expense relative to pre-tax income. However, in 2021, the rate reverted to a negative value (-4.63%), albeit much closer to zero than in prior years. This fluctuation may reflect changes in profitability, deferred tax items, or tax credits affecting the company's effective tax burden.

Overall Insights

The consistent statutory rate after 2017 provides a stable benchmark for evaluating effective tax performance. The negative and volatile effective tax rates suggest the company experienced irregular tax situations, possibly related to net losses or tax planning strategies. The movement toward a positive effective rate in 2020 followed by a return to a negative rate in 2021 highlights the variability in taxable income or tax attributes impacting the company over this period.

Net Operating Loss Carryforwards

The net operating loss carryforwards showed fluctuation, starting from $17,431 thousand in 2017, dipping to $3,087 thousand in 2020, then sharply rising to $48,689 thousand in 2021. This indicates intermittent usage or recognition, with a significant increase in 2021.

Research and Development Credit Carryforwards

R&D credit carryforwards increased steadily from $3,597 thousand in 2017 to a peak of $13,133 thousand in 2019, followed by a decline to $367 thousand by 2021. This suggests a reduction in potential R&D tax credits in recent years.

Convertible Debt

Convertible debt was not reported until 2021, where it appeared at $47,142 thousand, implying new financing activities or restructuring involving convertible instruments during that year.

Depreciation

Depreciation data was absent in initial years and appeared in 2021 at $47,055 thousand. Meanwhile, a separate negative depreciation figure declined from -$6,850 thousand in 2017 to -$4,210 thousand in 2020, suggesting changes in asset depreciation recording or method adjustments.

Lease Liability

Lease liability was recorded from 2019 onward, starting at $18,666 thousand, slightly decreasing in 2020 to $17,259 thousand, then nearly doubling to $35,871 thousand in 2021, indicating increased lease obligations.

Stock-based Compensation Expense

Stock-based compensation expense rose consistently from $3,776 thousand in 2017 to $19,319 thousand in 2021, reflecting growing employee compensation through equity-based incentives.

Accrued Bonus

Accrued bonus amounts exhibited steady growth from $1,049 thousand in 2018 to $11,850 thousand in 2021, signaling increasing bonus liabilities or improved accrual practices over time.

Excess Tax Basis in Intangible Assets

This asset showed variability, peaking at $12,109 thousand in 2018 before declining to around $1,585 thousand in 2021, indicating changes in recorded intangible asset adjustments relevant for tax purposes.

Deferred Rent

Deferred rent was only reported in 2017 and 2018 at modest amounts ($573 thousand and $529 thousand, respectively), then ceased to appear, possibly due to changes in accounting for rent obligations.

Other Deferred Tax Assets

Values fluctuated but showed a general upward trend, from $1,858 thousand in 2018 to a significant increase of $14,651 thousand in 2021, contributing to the overall increase in total deferred tax assets.

Deferred Tax Assets

Total deferred tax assets increased substantially over time, from $28,918 thousand in 2017 to $226,529 thousand in 2021, reflecting growing tax benefits expected to be realized in the future.

Valuation Allowance

The valuation allowance remained negative throughout, fluctuating between -$1,834 thousand and -$11,021 thousand, indicating allowances made to reduce deferred tax assets to levels expected to be realized, with relatively minor changes.

Net Deferred Tax Asset

The net deferred tax asset followed a rising trend, growing from $17,897 thousand in 2017 to $224,695 thousand in 2021, showing improved expectations for future tax benefits after valuation allowances.

Excess Book Basis in Intangible Assets

This figure was negative from 2018 onwards, worsening significantly from -$39500 thousand in 2019 to -$173,097 thousand in 2021, reflecting increased book basis over tax basis in intangible assets.

Right-of-Use Asset

The right-of-use asset was negative and reported from 2019 to 2021, decreasing from -$17,596 thousand in 2019 to -$34,612 thousand in 2021, aligning with increased lease liabilities and new lease accounting standards.

Restructuring Liability

Restructuring liability consistently decreased from -$33,783 thousand in 2017 to -$23,985 thousand in 2020, after which there was no data for 2021, suggesting ongoing usage or settlements of such liabilities.

Deferred Tax Liabilities

Total deferred tax liabilities increased overall, from -$41,524 thousand in 2017 to -$208,316 thousand in 2021, indicating rising future tax obligations or deferred taxes on book-tax differences.

Net Deferred Tax Assets (Liabilities)

This net figure showed negative values from 2017 to 2020, hitting -$58,366 thousand at year-end 2020, then swung to a positive $16,379 thousand in 2021. This sharp reversal suggests major reclassifications or adjustments in deferred tax positions.

Deferred Tax Assets

Deferred tax assets experienced significant fluctuations during the period under review. Starting from a relatively low base of 159 thousand US dollars at the end of 2017, there was a remarkable surge to 23,464 thousand US dollars by the end of 2018. This was followed by a decrease to 14,257 thousand US dollars in 2019 and a further steep decline to 115 thousand US dollars in 2020. However, the assets rebounded notably in 2021, reaching 95,863 thousand US dollars, which represents the highest value within the five-year period examined.

Deferred Tax Liabilities

Deferred tax liabilities demonstrated a consistent upward trend through most of the reviewed years. Beginning at 23,786 thousand US dollars in 2017, liabilities increased steadily to 30,455 thousand US dollars in 2018 and then saw a more than doubling to 64,497 thousand US dollars in 2019. In 2020, a slight reduction to 58,481 thousand US dollars was observed, followed by a renewed increase to 79,484 thousand US dollars in 2021, marking the highest point registered in the period.

Overall Observations

The data reveals volatility in deferred tax assets, with notable spikes and declines, particularly a steep fall in 2020 before a strong recovery in 2021. Deferred tax liabilities mostly trended upward, although with a minor dip in 2020. The pronounced variability in both metrics during 2020 could indicate changes in tax positions or differences in temporary differences that affect deferred taxes. The substantial increase in deferred tax assets in 2021 suggests improved expected future tax benefits, while the increasing deferred tax liabilities imply growing future tax obligations.

The financial data exhibits notable trends over the five-year period from 2017 to 2021, reflecting changes in assets, liabilities, equity, and net income both in reported and adjusted forms.

Total Assets

Reported total assets have shown consistent growth, increasing from approximately 605.6 million USD in 2017 to about 3.83 billion USD by the end of 2021. Adjusted total assets mirror this upward trajectory but consistently register slightly lower values compared to reported figures in later years, particularly in 2021 where adjusted assets are roughly 3.74 billion USD, indicating some downward adjustments impacting asset valuation.

Total Liabilities

Reported total liabilities have surged substantially, growing from 208.7 million USD in 2017 to over 3.2 billion USD in 2021. Adjusted liabilities are consistently lower than reported liabilities each year, with the gap widening over time, reaching around 3.12 billion USD in 2021. This suggests that adjustments primarily reduce liability figures, but overall liabilities have escalated significantly, indicating increased financial obligations or borrowing.

Stockholders’ Equity

Reported stockholders’ equity demonstrated modest increases from 2017 through 2019, followed by a significant jump in 2020 to approximately 742 million USD, before declining to 629 million USD in 2021. Adjusted equity shows a similar pattern, rising steadily up to 2020 to a higher level than reported equity (around 801 million USD) and then decreasing to about 612 million USD in 2021. The fluctuation and eventual decrease in equity in 2021 may reflect changes in retained earnings or adjustments impacting shareholder value.

Net Income

Reported net income experienced growth with some variability: starting at 81.8 million USD in 2017, dipping slightly in 2018, then rising in 2019, followed by a substantial increase to approximately 349 million USD in 2020 and nearly 494 million USD in 2021. Adjusted net income follows a similar trend but is noticeably lower than reported net income in most years. The adjusted figures start significantly below reported income in 2017 (38.1 million USD vs. 81.8 million USD), rise gradually, and reach around 405 million USD in 2021. This implies that tax adjustments or other reconciliation effects materially affect the reported earnings, yielding a more conservative measure of profitability.

Overall, the data illustrates a robust expansion in asset base and liabilities, with substantial increases in net income that are partially tempered when adjustments are considered. The diverging paths between reported and adjusted figures highlight the financial impact of deferred taxes or other accounting adjustments on the company's financial position and performance metrics across the analyzed timeframe.

The financial data exhibits notable variations in profitability, asset utilization, and leverage over the analyzed periods.

Net Profit Margin

The reported net profit margin demonstrates an overall increasing trend, starting at 18.54% in 2017, dipping to 11.72% in 2019, then rising to 21.19% by 2021. Adjusted net profit margin follows a somewhat similar trajectory but with less pronounced fluctuations, ranging from 8.64% in 2017 to a peak of 20.37% in 2020 before declining to 17.37% in 2021. This indicates that adjustments for deferred taxes may moderate the reported profitability but still reflect underlying improvements in profit margins over time.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios show slight decreases from 0.73 in 2017 to around 0.61-0.62 in 2021. The highest turnover ratios occurred in 2017 and 2020, suggesting intermittent efficiency improvements in asset utilization. However, the general trend points to a moderate decline in how effectively assets generate revenue over the period.

Financial Leverage

Financial leverage ratios exhibit a significant increase across the years, particularly from 2019 onwards. Reported leverage rose from 1.53 in 2017 to a substantial 6.1 by 2021. Adjusted leverage follows a similar trend. This escalation suggests a growing reliance on debt or other liabilities to finance assets, which amplifies risk but may also enhance return on equity if managed effectively.

Return on Equity (ROE)

ROE shows marked growth, especially in the reported figures, climbing from 20.61% in 2017 to a peak of 78.51% in 2021. Adjusted ROE also increases but at a lower magnitude, reaching 66.08% in 2021. The pronounced rise in ROE correlates with increased financial leverage, indicating that leverage is a significant driver of equity returns. However, such high ROE levels may reflect increased financial risk.

Return on Assets (ROA)

ROA values are generally positive but fluctuate. Reported ROA starts at 13.51% in 2017, declines to 6.22% in 2019, rebounds to 14.52% in 2020, but then decreases to 12.88% in 2021. Adjusted ROA shows a similar pattern, albeit with lower absolute values, emphasizing that asset profitability remains moderate and variable. The divergence between ROA and ROE trends highlights the substantial impact of financial leverage on overall equity returns.

In summary, the company demonstrates improving profitability margins and increasing returns on equity, heavily influenced by rising financial leverage. Asset turnover shows a mild declining trend, indicating modest reductions in operational efficiency concerning asset use. The rising leverage ratio suggests amplified financial risk, which stakeholders should monitor carefully in assessing future performance stability.

The financial data reveals notable trends in reported and adjusted net income along with their respective profit margins over the five-year period from 2017 to 2021. Both sets of figures demonstrate considerable growth, with some divergences in trends and magnitudes.

Reported net income

The reported net income shows an initial slight decline from 81,800 thousand US dollars in 2017 to 77,491 thousand in 2018. Subsequently, it increased steadily each year, reaching a significant peak of 493,507 thousand US dollars in 2021. This represents a substantial overall upward trajectory with a particularly sharp rise between 2019 and 2020.

Adjusted net income

Adjusted net income grew more consistently across the period, starting lower than the reported net income at 38,107 thousand US dollars in 2017 but experiencing continuous growth up to 404,555 thousand by 2021. The adjusted figures show a more gradual increase relative to the reported net income, peaking in 2020 before a slight decline in 2021.

Reported net profit margin

The reported net profit margin reflects a downward trend from 18.54% in 2017 to 11.72% in 2019, followed by a pronounced recovery to approximately 21% in both 2020 and 2021. This pattern suggests initial margin compression succeeded by strong profitability improvement during the later years.

Adjusted net profit margin

The adjusted net profit margin steadily increased from 8.64% in 2017 to a peak of 20.37% in 2020. However, unlike the reported margin, it declined to 17.37% in 2021. This indicates that while operational profitability improved consistently through 2020, there was a relative softness in the adjusted margin in the final year.

Comparative insights

The divergence between reported and adjusted net income and margins throughout the period suggests that adjustments for income tax and possibly other factors impact the net results significantly, especially in the early years. The notable spike in reported net income and margin in 2020 and 2021 contrasts with the more tempered adjusted figures, potentially indicating the influence of deferred tax effects or other non-operational adjustments contributing positively to reported profitability.

Overall, both income measures show strong growth with particularly marked improvements starting in 2020. The adjusted profit margin’s peak followed by a decline indicates some challenges or changes affecting underlying profitability in 2021 that are not as pronounced in the reported figures.

The financial data exhibits substantive growth in total assets over the five-year period, both in reported and adjusted figures. Reported total assets increased significantly from approximately $605.6 million in 2017 to $3.83 billion in 2021, reflecting a more than sixfold rise. The adjusted total assets similarly escalated from about $605.4 million to $3.74 billion over the same period, indicating consistency between reported and adjusted asset values with minor deviations.

Regarding operational efficiency, as measured by total asset turnover ratios, the trend shows some fluctuations. The reported total asset turnover commenced at 0.73 in 2017, decreased steadily to a low of 0.53 in 2019, then rebounded to 0.72 by 2020 before declining again slightly to 0.61 in 2021. The adjusted total asset turnover follows a similar pattern, starting at 0.73 in 2017, dipping to 0.54 in 2019, rising to 0.72 in 2020, and then experiencing a modest dip to 0.62 in 2021.

This trend indicates that although the company significantly expanded its asset base, its efficiency in generating revenue from these assets decreased initially until 2019, recovered in 2020, but faced a mild reduction again in 2021. The relatively close alignment between reported and adjusted ratios suggests that the impact of deferred income tax adjustments on these operational efficiency metrics is minimal.

Overall, the data reveals a strong growth trajectory in asset accumulation, with fluctuating but moderate variations in asset turnover, which may reflect strategic investments impacting short-term operational efficiency while potentially positioning for longer-term gains.

The data reveal a consistent upward trajectory in total assets from 2017 through 2021. Reported total assets increased from approximately $605.6 million in 2017 to $3.83 billion in 2021, reflecting substantial growth. Adjusted total assets follow a similar pattern, with values closely aligned yet slightly lower in later years, decreasing the gap notably in 2021 compared to earlier periods.

Stockholders’ equity, both reported and adjusted, shows a fluctuating trend. Reported equity presents marginal growth from about $396.9 million in 2017 to $406.6 million in 2019, followed by a significant rise to $742.4 million in 2020, then a decline to $628.6 million in 2021. Adjusted equity values are generally higher than reported equity in most years, with a peak of approximately $800.8 million in 2020 before dropping to $612.2 million in 2021. The marked increase in equity in 2020, followed by a decrease the subsequent year, suggests notable financial events impacting equity beyond the steady increases in assets.

Financial leverage ratios, reported and adjusted, demonstrate increasing leverage over the period, which signals a growing reliance on debt financing relative to equity. Reported financial leverage rose from 1.53 in 2017 to 6.1 in 2021, with a peak at 3.79 in 2019 before smoothing out slightly in 2020 and then surging sharply in 2021. Adjusted leverage ratios follow a similar pattern but remain slightly lower than reported values until 2021 where both converge at 6.1. The significant jump in leverage in 2021 reveals a substantial increase in liabilities or a reduction in equity relative to assets.

Overall, the trends point to organizational growth with expanding asset bases accompanied by fluctuating equity values and a marked increase in financial leverage. The convergence of reported and adjusted metrics in 2021 highlights a narrowing in adjusted adjustments related to income tax impacts, suggesting alignment between reported and adjusted financial positions for that year.

Total Assets

Show steady growth from 2017 through 2021, more than sixfold increase in reported values.

Adjusted assets closely follow reported values with minor deviations, particularly narrowing in 2021.

Stockholders’ Equity

Generally increased through 2019, with a pronounced peak in 2020, then decreased in 2021.

Adjusted equity tends to be higher than reported equity until 2021 where it falls below reported equity.

Financial Leverage

Significantly increased over the five-year period, indicating heightened leverage.

Adjusted ratios are slightly lower than reported until 2021, converging at the same high level.

Interpretation

Rising total assets and increased leverage suggest aggressive expansion potentially funded by debt.

Equity fluctuations may indicate varying profitability, capital injections, or distributions across years.

Narrowing differences between reported and adjusted figures in the final year indicate alignment in tax adjustments.

The financial data over the five-year period demonstrates significant growth and variability in reported and adjusted income and equity metrics, reflecting underlying changes in income tax accounting adjustments and operational performance.

Net Income Trends

Reported net income shows an overall upward trajectory, rising from 81.8 million USD in 2017 to 493.5 million USD in 2021. The increase is particularly pronounced between 2019 and 2020, with reported net income rising sharply from 95.9 million USD to 349.2 million USD, and continuing to grow into 2021. Adjusted net income follows a similar upward trend but shows more moderated growth relative to the reported figures, increasing from 38.1 million USD in 2017 to 404.6 million USD in 2021. The difference between reported and adjusted net income widens notably in 2020 and 2021, indicating that deferred income tax adjustments have a growing impact on the net income figures during these years.

Stockholders' Equity Trends

Reported stockholders' equity remains relatively stable from 2017 to 2019, ranging between approximately 397 million USD and 407 million USD. However, it nearly doubles in 2020 to 742.4 million USD before declining to 628.6 million USD in 2021. Adjusted stockholders’ equity follows a broadly similar pattern but at slightly higher absolute values in most years, with a peak in 2020 at about 800.8 million USD, before also decreasing in 2021 to 612.2 million USD. The fluctuations suggest significant changes in accounting for deferred taxes or other equity adjustments around the 2020 period.

Return on Equity (ROE) Patterns

Both reported and adjusted ROE exhibit strong growth over the analyzed period. Reported ROE starts at 20.61% in 2017, declining slightly in 2018 before increasing markedly to 78.51% by 2021. Adjusted ROE shows a similar pattern but at consistently lower levels, beginning at 9.06% in 2017 and rising to 66.08% in 2021. The steep increase in ROE in the later years, particularly from 2019 onwards, reflects improved profitability relative to shareholders’ equity, even after adjustments. The gap between reported and adjusted ROE widens over time, paralleling the trends seen in net income and equity adjustments.

In summary, the company experienced significant growth in profitability from 2019 to 2021, with reported figures showing higher gains than adjusted values, likely due to deferred income tax effects. Stockholders’ equity expanded substantially in 2020, coinciding with the largest increases in net income and ROE, but then receded slightly in 2021. The adjustments reduce reported net income, equity, and ROE metrics, indicating that deferred tax and other adjustments materially affect financial performance assessments, especially in the most recent years.

The financial data reveals several important trends for the company over the five-year period ending December 31, 2021. Both reported and adjusted net income have generally increased, though at different rates and with some variation in growth patterns.

Net Income

Reported net income experienced a moderate increase from 81,800 thousand US dollars in 2017 to 95,894 thousand in 2019, followed by a significant surge to 349,246 thousand in 2020 and further growth to 493,507 thousand in 2021. Adjusted net income showed a steady upward trend throughout the period, with values rising from 38,107 thousand in 2017 to 83,208 thousand in 2019, then sharply increasing to 351,447 thousand in 2020 before slightly declining to 404,555 thousand in 2021. The substantial rise in 2020 indicates a notable improvement in profitability after adjusting for deferred income tax impacts.

Total Assets

Reported total assets grew consistently and robustly over the observed period, increasing from 605,583 thousand in 2017 to 3,831,809 thousand in 2021, demonstrating steady expansion of the asset base. Adjusted total assets followed a similar pattern but were marginally lower than reported figures, suggesting minor adjustments related to tax effects. The parallel growth in both reported and adjusted figures indicates sustained asset accumulation supporting the company's operations and growth strategy.

Return on Assets (ROA)

Reported ROA declined from 13.51% in 2017 to 6.22% in 2019, signaling diminished efficiency in generating earnings from assets during that period. However, there was a marked recovery in 2020 to 14.52%, before slightly declining to 12.88% in 2021. Adjusted ROA followed a comparable trajectory but with lower percentages initially; it was 6.29% in 2017, dipping to 5.45% in 2019, then sharply increasing to 14.62% in 2020 and slightly decreasing to 10.83% in 2021. The overall trend reflects improved profitability and asset utilization in recent years, particularly after accounting for deferred income tax effects.

In summary, the data demonstrates expanding net income and assets, with a pronounced improvement in profitability metrics beginning in 2020. The adjustments for deferred income taxes lead to lower initial income and ROA figures, but trends in adjusted data corroborate the general positive trajectory seen in the reported results. The notable growth in adjusted net income and return on assets in 2020 highlights a significant shift towards enhanced financial performance in that year and beyond.