Income Statement
The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.
Etsy Inc., consolidated income statement
US$ in thousands
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Revenue and Gross Profit
- There is a consistent and significant upward trend in revenue from 2017 to 2021, increasing from approximately $441 million to nearly $2.33 billion, reflecting strong growth over the five-year period. Gross profit similarly increased steadily, rising from about $290 million to over $1.67 billion, which indicates improving scale and profitability in core operations.
- Cost of Revenue
- Cost of revenue increased in absolute terms each year, rising from roughly $151 million in 2017 to about $655 million in 2021. While this represents higher costs parallel to growth in sales, the faster growth rate in revenue relative to cost of revenue suggests improvement in gross margin efficiency over time.
- Operating Expenses
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Operating expenses, including marketing, product development, and general and administrative costs, have also escalated substantially:
- Marketing
- Marketing expenditures nearly sextupled over the period, increasing from approximately $109 million to $655 million, reflecting an aggressive spending strategy likely aimed at fueling growth.
- Product Development
- Product development costs nearly quadrupled, rising steadily from about $75 million to $272 million, indicating increased investment in innovation and platform enhancement.
- General and Administrative
- General and administrative expenses more than tripled, growing from approximately $91 million to $283 million, which may be attributed to scaling organizational infrastructure and administrative requirements.
Overall operating expenses grew significantly, from $278 million in 2017 to nearly $1.21 billion in 2021, an increase consistent with expanding operations and increased investment to support growth.
- Income from Operations
- Income from operations experienced notable growth, increasing from about $12 million in 2017 to $466 million in 2021. This marked improvement suggests that despite rising operating expenses, revenue growth and gross profit expansion have driven enhanced operational profitability.
- Non-Operating Items
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Interest expense initially grew, peaking in 2020 at $42 million before dropping sharply to under $10 million in 2021, possibly reflecting debt management initiatives. Interest and other income showed fluctuations, peaking in 2019 at about $13 million before declining subsequently.
Foreign exchange gains and losses were volatile, with significant swings including a large gain in 2017 and losses in some subsequent years; however, a positive gain occurred again in 2021.
Other income and expenses varied, with losses in several years and a positive amount in 2021, reflecting some non-recurring or irregular items influencing earnings.
- Income Before Taxes and Net Income
- Income before income taxes followed a consistent positive trajectory, growing from approximately $32 million in 2017 to nearly $472 million in 2021. Net income demonstrated strong growth as well, rising from roughly $82 million to nearly $494 million during the same period. The profitability trend is indicative of effective cost control relative to revenue and successful scaling.
- Provision for Income Taxes
- The provision for income taxes showed variability, including negative tax benefits in 2020 and positive amounts in other years. Despite fluctuations, this line item remains a relatively small proportion of pre-tax income, suggesting efficient tax management or impacts from tax credits or carryforwards.
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