Name: Etsy Inc. (NASDAQ:ETSY) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Etsy Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income	493,507)	349,246)	95,894)	77,491)	81,800)
Stock-based compensation expense	139,910)	65,114)	44,395)	38,231)	26,559)
Depreciation and amortization expense	74,267)	58,189)	48,031)	26,742)	27,197)
Provision for expected credit losses	16,031)	15,033)	10,963)	4,124)	2,497)
Foreign exchange (gain) loss	(14,071)	7,349)	(5,708)	5,997)	(29,105)
Amortization of debt issuance costs	3,719)	2,751)	2,006)	1,191)	463)
Non-cash interest expense	578)	36,086)	19,108)	10,968)	3,117)
Interest (income) expense on marketable securities	3,154)	2,729)	(4,182)	(2,887)	426)
Asset impairment charges	—)	—)	—)	—)	3,162)
Deferred provision (benefit) for income taxes	(88,952)	2,202)	(15,248)	(22,414)	(47,972)
Loss on extinguishment of debt	—)	16,855)	—)	—)	—)
Other non-cash (income) expense, net	(475)	(795)	1,667)	136)	520)
Accounts receivable	(19,256)	(22,540)	(12,656)	17,215)	(8,826)
Funds receivable and seller accounts	(83,941)	(90,141)	(23,177)	23,436)	(13,477)
Prepaid expenses and other current assets	(44,186)	(16,963)	(14,156)	(4,785)	(4,429)
Other assets	(25,159)	4,816)	4,045)	43)	(28)
Accounts payable	(14,169)	14,550)	(953)	13,364)	2,837)
Accrued and other current liabilities	84,789)	146,634)	37,410)	23,079)	3,207)
Funds payable and amounts due to sellers	83,941)	90,141)	23,177)	(23,436)	13,477)
Deferred revenue	1,441)	3,312)	191)	1,331)	434)
Other liabilities	40,423)	(5,612)	(3,887)	9,099)	5,561)
Changes in operating assets and liabilities, net of acquisitions	23,883)	124,197)	9,994)	59,346)	(1,244)
Adjustments to reconcile net income to net cash provided by operating activities	158,044)	329,710)	111,026)	121,434)	(14,380)
Net cash provided by operating activities	651,551)	678,956)	206,920)	198,925)	67,420)
Acquisition of businesses, net of cash acquired	(1,699,974)	—)	(270,409)	—)	—)
Cash paid for asset acquisition and intangible assets	(1,937)	(880)	(1,963)	(35,494)	—)
Purchases of property and equipment	(11,248)	(1,445)	(7,528)	(1,019)	(3,948)
Development of internal-use software	(16,922)	(5,665)	(7,750)	(19,537)	(9,208)
Purchases of marketable securities	(418,518)	(499,237)	(661,821)	(514,286)	(62,348)
Sales and maturities of marketable securities	590,630)	495,848)	461,098)	284,943)	137,340)
Net cash (used in) provided by investing activities	(1,557,969)	(11,379)	(488,373)	(285,393)	61,836)
Payment of tax obligations on vested equity awards	(118,167)	(47,716)	(32,547)	(24,065)	(6,417)
Repurchase of stock	(302,774)	(268,653)	(176,985)	(134,647)	(10,301)
Proceeds from exercise of stock options	22,706)	25,319)	9,791)	18,253)	33,838)
Proceeds from issuance of convertible senior notes	1,000,000)	650,000)	650,000)	345,000)	—)
Payment of debt issuance costs	(13,300)	(10,531)	(11,904)	(9,962)	—)
Purchase of capped calls	(85,000)	(74,685)	(76,180)	(34,224)	—)
Settlement of convertible senior notes	(43,900)	(137,168)	—)	—)	—)
Payments on finance lease obligations	(8,864)	(9,211)	(10,833)	(6,057)	(7,798)
Payments on facility financing obligation	—)	—)	—)	(10,164)	(5,883)
Other financing, net	2,048)	(8,073)	8,265)	(128)	—)
Net cash provided by financing activities	452,749)	119,282)	359,607)	144,006)	3,439)
Effect of exchange rate changes on cash	(10,234)	13,947)	(1,846)	(5,995)	1,155)
Net increase (decrease) in cash, cash equivalents, and restricted cash	(463,903)	800,806)	76,308)	51,543)	133,850)
Cash, cash equivalents, and restricted cash at beginning of period	1,249,440)	448,634)	372,326)	320,783)	181,592)
Cash, cash equivalents, and restricted cash at end of period	785,537)	1,249,440)	448,634)	372,326)	315,442)

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).

Operating cash flow demonstrates a strong upward trajectory from 2017 to 2021, characterized by a significant acceleration in net income and net cash provided by operating activities. Net income grew from 81.8 million in 2017 to 493.5 million in 2021, with a notable surge occurring in 2020. This growth in operational liquidity is further supported by substantial non-cash adjustments, most notably stock-based compensation and depreciation and amortization, both of which increased consistently over the period.

Operating Cash Flow Dynamics: Net cash provided by operating activities rose from 67.4 million in 2017 to a peak of 678.9 million in 2020, remaining robust at 651.6 million in 2021. The expansion was driven by increased net income and positive adjustments from stock-based compensation, which grew from 26.6 million in 2017 to 139.9 million in 2021. Changes in operating assets and liabilities also contributed positively, particularly in 2020, where a 124.2 million increase was observed.
Investing Activities and Capital Allocation: Investing activities shifted from a focus on marketable securities management to aggressive strategic acquisitions. While the company maintained a light capital expenditure profile regarding property, equipment, and internal-use software, a massive acquisition of businesses totaling 1.7 billion occurred in 2021. This represents a significant pivot in capital deployment compared to the 270.4 million spent on acquisitions in 2019 and the minimal spending in other years.
Financing Strategy and Shareholder Returns: The financing profile is marked by a reliance on the issuance of convertible senior notes to fund operations and shareholder returns. Proceeds from these notes increased steadily, reaching 1 billion in 2021. Simultaneously, the company aggressively increased its share repurchase program, with spending rising from 10.3 million in 2017 to 302.8 million in 2021. Outflows for capped calls also increased, reaching 85 million in 2021, indicating a structured approach to managing the dilution and cost of convertible debt.
Liquidity and Cash Position: The overall cash position peaked at the end of 2020 with 1.25 billion in cash, cash equivalents, and restricted cash. However, this balance decreased to 785.5 million by the end of 2021, primarily due to the substantial cash outflow for business acquisitions. Despite this decrease, the company maintains a strong liquidity position supported by consistent operating cash generation and access to debt markets.

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