Etsy Inc. (NASDAQ:ETSY)

Revenue

There has been a consistent and substantial increase in revenue from 2015 through 2021. Starting at approximately $273.5 million in 2015, revenue rose steadily each year, reaching over $2.3 billion by the end of 2021. The most significant jumps occurred in 2020 and 2021, where revenue nearly doubled from 2019 to 2020 and continued to grow strongly into 2021.

Income (loss) from operations

The operational income shows a marked improvement over the period. Initially, there was an operational loss of about $1.9 million in 2015. This shifted to positive operating income in 2016, which further increased each year. By 2019, operating income was approximately $88.8 million. A substantial surge is seen in 2020 and 2021, with operating income reaching $424 million and $465.7 million, respectively. This indicates significant operational efficiency and scalability corresponding with the growth in revenue.

Net income (loss)

Net income followed a similar trend to operating income but with higher volatility earlier on. The company experienced net losses in 2015 and 2016, with losses of approximately $54.1 million and $29.9 million, respectively. From 2017 onwards, net income turned positive and demonstrated growth each year. The net income increased significantly in 2020 and 2021, reaching $349.2 million and $493.5 million respectively, reflecting the overall stronger profitability and possibly effective cost management and revenue scaling.

The financial data reveals notable trends in the company's asset structure over the examined periods from the end of 2015 through the end of 2021.

Current Assets

There is a consistent upward trend in current assets, with values increasing from $359,054 thousand in 2015 to a peak of $1,894,781 thousand in 2020. However, a decrease followed in 2021, with the figure dropping to $1,341,501 thousand. This pattern indicates robust growth in short-term assets over the years, with a significant surge between 2018 and 2020, followed by a contraction in the latest period.

Total Assets

Total assets also show a marked increase across the time frame. Starting at $553,061 thousand in 2015, total assets rose steadily each year, reaching $2,404,489 thousand in 2020 and further increasing to $3,831,809 thousand by 2021. This indicates substantial expansion in overall asset base, with the most pronounced growth occurring in the later years, particularly from 2019 onwards.

Comparative Observations

The relationship between current assets and total assets suggests a general growth in both short-term and long-term asset components. While current assets experienced a decline in the final year, total assets continued their upward trajectory, implying increased investment or accumulation of longer-term assets. This divergence may reflect strategic asset reallocation or shifts in operational focus.

The analysis of the financial data reveals significant trends in the company's liabilities and stockholders' equity over the seven-year period.

Current Liabilities

There is a consistent upward trend in current liabilities from 2015 through 2021. Starting at $80.1 million in 2015, current liabilities rose moderately until 2018, followed by a sharp increase from 2019 onwards, reaching over $615.6 million by the end of 2021. This indicates growing short-term obligations which could impact liquidity management.

Total Liabilities

Total liabilities demonstrate a volatile yet strongly increasing trend, nearly doubling each year after 2018. From $222.6 million in 2015, total liabilities slightly fluctuated before spiking steeply from $500.9 million in 2018 to over $3.2 billion by 2021. This substantial increase is primarily driven by increasing debt levels.

Debt and Finance Lease Obligations

Debt components mirror the total liabilities trend, remaining relatively stable in the initial three years and then escalating dramatically. Debt rose from approximately $65 million in 2015 to nearly $2.4 billion by 2021, indicating the company's significant leverage expansion, especially post-2018.

Stockholders' Equity

Stockholders' equity saw a moderate increase from $330.5 million in 2015 to a peak of about $742.4 million in 2020, reflecting growth in retained earnings or capital contributions during this period. However, a notable decline occurred in 2021, dropping to $628.6 million, which may imply changes in equity financing or accumulated losses for that year.

In summary, the financial structure is characterized by a rapid increase in liabilities, particularly long-term debt, which has outpaced growth in stockholders' equity after 2018. This shift points to an increased reliance on debt financing, raising potential considerations regarding financial risk and capital structure stability.

Net cash provided by operating activities

The cash generated from operating activities exhibited a consistent upward trend from 2015 through 2021, with significant acceleration particularly noticeable starting in 2018. Beginning at approximately $29 million in 2015, it increased steadily each year, reaching a peak of nearly $679 million in 2020 before slightly declining to approximately $652 million in 2021. This suggests a strong and improving core operational cash flow generation capability over the analyzed period, reflecting potentially increased profitability or improved working capital management.

Net cash (used in) provided by investing activities

The cash flow from investing activities displayed considerable volatility throughout the years. The company experienced negative cash flow in the initial periods of 2015 and 2016, with a steep decline in 2016 nearing $135 million outflow. An exception occurred in 2017, with positive investing cash inflow amounting to approximately $62 million, which could indicate asset sales or returns on investments. However, this was followed again by significant outflows in 2018 and 2019, with $285 million and $488 million used respectively. In 2020, outflows were minimal, but a sharp increase in cash used occurred in 2021, reaching almost $1.56 billion, suggesting sizeable investments or acquisitions during that year.

Net cash provided by financing activities

Financing cash flows showed fluctuation but overall positive contributions to cash resources. The year 2015 stands out with a very high inflow of approximately $200 million. The subsequent years until 2017 saw relatively modest inflows of $3 to $6 million, indicating limited financing transactions. A resurgence occurred in 2018 and 2019, with strong inflows of $144 million and $360 million respectively. While 2020 had a drop to $119 million, 2021 again observed a significant increase to roughly $453 million. These patterns may reflect varying financing strategies including debt issuance, repayments, or equity activities in response to investment needs and operating performance.

Earnings per share (Basic)

The basic earnings per share demonstrated a notable improvement over the observed period. Initially, there was a negative value of -0.59 US dollars in 2015, indicating a loss per share. This negative position improved to -0.26 US dollars in 2016. From 2017 onwards, the earnings per share turned positive and showed consistent growth. Specifically, the earnings increased from 0.69 US dollars in 2017 to 0.8 US dollars in 2019. A significant surge occurred in 2020, where the basic earnings per share rose sharply to 2.88 US dollars, continuing to increase to 3.88 US dollars in 2021.

Earnings per share (Diluted)

The diluted earnings per share followed a trend similar to the basic earnings per share. The value was negative initially at -0.59 US dollars in 2015 and improved to -0.26 US dollars in 2016. Positive values were observed from 2017, starting at 0.68 US dollars and gradually increasing to 0.76 US dollars in 2019. The diluted EPS also saw a marked increase in 2020, reaching 2.69 US dollars, and further growing to 3.4 US dollars in 2021. Throughout the timeline, the diluted EPS consistently remained slightly below the basic EPS.

Dividend per share

There was no record of dividends per share during the entire period from 2015 through 2021, indicating that the company did not pay out dividends to shareholders in these years.

Overall Analysis

The earnings per share data indicate a strong positive shift in company profitability beginning in 2017, transitioning from losses to sustained profit growth. The especially significant increases in 2020 and 2021 suggest a period of accelerated financial performance or expansion. The absence of dividend payments suggests a reinvestment strategy or preference to retain earnings for growth. Overall, the financial performance as reflected in earnings per share ratios denotes improving profitability and positive investor returns over the examined timeframe.