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The numbers at a glance: Revenue 2012 $74.6M+ 2013: $125M+ 2014: $195.5M+ Profit: Net loss 2012: (2.3M+) 2013: (0.7M+) 2014: (15.2M+) $88M cash on hand - so
by djloche 12y ago
The numbers at a glance:
Revenue
2012 $74.6M+
2013: $125M+
2014: $195.5M+
Profit:
Net loss
2012: (2.3M+)
2013: (0.7M+)
2014: (15.2M+)
$88M cash on hand - so they can afford to run at a loss for a few years while they grow the company. I guess it makes sense to go public and raise more cash while the market is hot.
- amosson 12y agoIt looks like there Free Cash Flow in 2014 was about $4MM positive so they aren't really burning cash
- zzleeper 12y agoHow's that possible? I would expect them to be investing heavily which means low FCF even with positive profits. I also doubt they are decreasing inventory (do they even hold it?) Maybe the positive cf is just a fluke due to Xmas season? If you sell a lot before the end of the year, and only pay your sellers in Jan, and you have an exponential growth, then the positive cf may mean nothing..
- mediaman 12y agoSome growing companies have positive cash flow but negative earnings as long as they are growing. For example, they may take credit card payments from customers, but pay suppliers on terms. In which case growth causes consistent annual free cash flow higher than earnings. Amazon is a decent example of this where their earnings suck, but their FCF has been reasonable every year. I'm not sure about the particulars of how Etsy issues payment to suppliers though.
- djloche 12y agoIf you look at their expenses, a huge chunk of their 'loss' is them issuing shares to employees. They're required to count this as a cash expense. You can make the argument that they could be profitable if they stopped granting shares, but in reality, this is part of their employee compensation plan and if they stopped issuing shares, they'd likely have to incur actual cashflow costs in order to keep their employees (eg. higher salaries or cash bonuses). Amazon is in a similar situation.
- meritt 12y agoMy financial analysis skills must be weak but how does a company take a loss every year yet also have $88M in the bank?
- pyrrhotech 12y agothey raised more than 88 million in the past?
- timdorr 12y agoThey've taken $97.3M before: https://www.crunchbase.com/organization/etsy https://www.crunchbase.com/organization/etsy Presumably they had some profitable years prior to 2012 or have maintained limited losses. Either way, it looks like they're gearing up for some big growth in the next few years. They dipped into the coffers in 2014 and will raise a lot of money from this IPO, so they'll have plenty of cash to burn on fast growth. It should be interesting to watch!
- meritt 12y agoHrm, that's a bit of a red flag to me. Why bother raising so much money if you're not going to utilize it? Surely growing your business will outpace average annual investment returns. I'm sure the investors have to be annoyed they basically just transferred their assets to Etsy to sit on and not utilize. And now they're trying to raise an additional $100M via an IPO? It's not like Apple who are literally in the position of "We have so much money we don't know what to do with it."
- jonknee 12y ago> I'm sure the investors have to be annoyed they basically just transferred their assets to Etsy to sit on and not utilize. Considering they all stand to make a bundle through the IPO I'm sure the investors are collectively not-annoyed that Etsy hasn't wasted their money.
- bbcbasic 12y ago
- callmeed 12y agoHold on ... is that $195.5M in revenue their actual revenue from listing fees? Or is that the total sales revenue from all the sellers?