Joshua Silverman
Chief Executive Officer, President and Director at Etsy
Thanks, Deb, and good evening, everyone. In recent years, it seems one of the only real certainties has been uncertainty. You could say it's the new normal. We believe that over the past five years, our team has demonstrated its agility and adaptability, and our business model has shown resiliency through many types of macro conditions.
In Q1, we rose to the occasion once again to deliver solid results in a challenging quarter, maintaining almost all of the gains reported during the extremely strong year ago period. Our consolidated GMS was $3.3 billion, up 3.5% year-over-year or approximately 5% on a constant currency basis, with the Etsy marketplace GMS down about 2% as we lapped the exceptionally strong growth of the prior year. Consolidated revenue grew 5.2%, and our adjusted EBITDA margin was 27.5%. Rachel will cover the results in more detail shortly.
Etsy experienced a tidal wave of growth over the past 2 years. As so much of the world shut down, we went from serving 2.6 million to 5.5 million active sellers and from 47 million to nearly 90 million active buyers, and etsy.com GMS grew from about $1.2 billion in the first quarter of 2020 to $2.8 billion this past quarter. We have provided a pathway to economic opportunity for millions and a meaningful alternative for buyers looking to not be just another cog in the complex and increasingly commoditized global supply chain.
As we move from the COVID pandemic to what appears to be an endemic, people have regained their mobility. And with that, come so many more choices for where to spend their hard-earned dollars. This is a great thing for humanity, and I personally couldn't be more relieved to see it. It also means that in the near term, we'll have to fight harder and invest more to continue to earn and grow Etsy's share of wallet with consumers, which is the only way that our much larger base of sellers can keep growing their sales. We're up for it.
The current macro climate makes the coming months more challenging to predict. However, over the long term, we continue to believe that the number of places to shop online will consolidate as the world continues to become more commoditized. The pandemic perhaps gave us the chance to preview what the world could look like for Etsy, where in a more consolidated, more commoditized future world, Etsy could flourish as one of the few meaningful alternatives amidst a sea of sameness.
Through this change, our mission has remained the same, to keep commerce human. We continue to believe that the strategy we laid out for you in 2019 centered on our Right to Win, keeps us on the right course. The only change is that we have even more conviction that the opportunity ahead is enormous. We plan to go after that opportunity with focus, discipline and heart.
Speaking of heart, the crisis in Ukraine weighs heavily on us all. Our thoughts are with everyone impacted in the region, especially Etsy sellers and buyers, as well as family and friends of our global team. Being part of a community means that when one part is suffering, the rest of us step up and offer support. To do our part, we've taken many steps to help Ukrainian sellers that are facing tremendous hardship. Our financial support, including providing listing credits and canceling current balances owed to us by sellers, totaled $4.6 million in the quarter.
The ability to make sales is more critical than ever for Ukrainian sellers. While shipping physical goods has gotten challenging for some, many sellers have pivoted to listing digital items from printable art to embroidery patterns as a means to generate income. We've also had a groundswell of interest from buyers who want to directly support small businesses in Ukraine. Our team has been working hard to ensure our sellers feel supported and to promote their listings to buyers. In total, our Ukraine-based sellers made over $11 million in sales in March, an average of nearly $1,400 per seller with the sale.
In 2019, we also laid out our levers for GMS growth, bringing more active buyers to the marketplace, getting them to shop more frequently and earning their trust on the larger as well as the smaller purchases. Since then, we've demonstrated that we can meet the everyday needs of millions of buyers across a vast array of purchase occasions, and that Etsy sellers have something delightful to offer. We've also driven our frequency forward in a meaningful way, but we have so much more to do. So I wanted to spend a little time today unpacking how we see these opportunities going forward.
Etsy is sometimes referred to as a niche marketplace, implying that we aren't relevant to most people or at minimum, that we aren't relevant very often. I couldn't disagree more and believe that our recent performance proves just how relevant the Etsy marketplace is to almost every type of person over so many different shopping occasions.
Let's take a look at the numbers. Starting with our current buyer base. We have about 89 million active buyers in nearly 250 countries. And just this past quarter, we acquired 7 million new buyers on top of the 73 million we added over the last 2 years. And moving to our categories. 15 Etsy marketplace categories each had over 1 million unique buyers in 2021. And of those, the seven shown on this slide, each had over 15 million unique buyers, demonstrating that Etsy is relevant to a large audience across a wide range of categories and occasions.
Digging into who these buyers are, according to our latest surveys and estimates, about 3/4 of etsy.com's U.S. and U.K. buyers identify as women and 1/4 identify as men. While we believe that gender identity is widely recognized as a spectrum, the following gender data relates to these two largest cohorts.
Starting with our core women buyers. We estimate that about 30% of adult women in the U.S. and the U.K. shopped on Etsy at least once in the past 12 months. And of those women, about 58% bought on 2 or more days and roughly 56% purchased in 2 or more Etsy categories in that same period. In my opinion, there's nothing niche about that. The inverse of this data is that about 70% of women in our top 2 markets didn't shop on Etsy during this period, leaving a lot more opportunity to grow.
Turning to the other roughly half of the world's population, those who identify as men. That's a huge population we began thinking about only recently. We estimate that about 10% of adult men in the U.S. and the U.K. shopped on Etsy at least once in the past 12 months. Roughly 37% of these men bought on Etsy on 2 or more days and 35% purchased in 2 or more categories over the same period. We recently conducted research to better understand men's shopping attitudes and behaviors, and learned that those who identify as men are as likely as women to be intentional shoppers, valuing handcrafted items, supporting small businesses, wanting to make a positive impact with their purchases or buying items that reflect their personality.
Our data also supports that among prospective buyers who are aware of Etsy, there's no difference in likelihood to visit Etsy by gender. The top 3 reasons men give for not shopping on Etsy are very similar to the reasons women give, although all relate to awareness. Etsy hasn't come to mind. I haven't had a need for the types of items they sell, and I don't know what Etsy offers. We estimate 35% of our new U.S. buyers in 2021 identify as men. We're just getting started understanding these buyers and developing product and marketing strategies to help them learn the when and the why of Etsy, so we can come to mind more often.
For example, we saw positive return on investment from some of our recent tactics using gender-neutral TV creative, with media placements on NFL and Hulu. And this year, we're piloting male influencer content to increase trial and trust in Etsy for buyers who identify as men. And we have so much more room to go on engagement and conversion. While nearly 90 million active buyers is impressive, we estimate that etsy.com had about 180 million unique visitors every month, meaning we can do so much better engaging and converting these visits. And we have over 100 million lapsed buyers. That's millions more who've already shopped with us, are familiar with us, but haven't shopped with us in the past 12 months.
Turning to our geographic opportunity. Etsy's all-time buyer penetration remains below 50% across all 7 of our core markets. The majority of Etsy's active buyers are still in the U.S. And so far, most of the data reviewed today relates to the U.S. and U.K., our 2 largest markets. If you were to look more closely at some of our other core markets, such as France, for example, you'd find that our prompted awareness there is only about 40% compared to about 90% in the U.S. and the U.K., and conversion rate is 50% lower in France than in the other 2 countries. In fact, penetration rates in the next 15 markets beyond the U.S. and U.K. are about 80% lower than those top 2 Etsy markets.
To size this more clearly, these 15 countries have a combined population that's 58% larger than the U.S. and approximately $20 trillion in GDP, similar to the U.S. This slide is not meant to signal any change in our near-term strategy to focus on our 7 core markets. It's only meant to illustrate our fervent belief that we have only just begun to scratch the surface of Etsy's long-term growth opportunity.
In addition to the size of the prize from a total buyer perspective, another key growth lever is frequency. As I mentioned earlier, the Etsy Marketplace has something great to offer across so many purchase occasions. Over the 12 months ending March 31, 2022, 44 million of our repeat buyers purchased on Etsy an average of 5 purchase days, and of these, 8 million or so are what we call habitual buyers. Well, to be a habitual buyer, a customer only needs to make a purchase on Etsy on 6 different days and spend $200 in a year, our habituals actually shop an average of about once a month.
They figured out the magic of Etsy. And yet there are still so many who haven't. In fact, even with all the progress in the recent past, half of Etsy's first quarter active buyers still bought only once during the trailing 12 months, and the vast majority of our habitual buyers are still in the U.S. We believe our frequency opportunity is still in its infancy.
Our last lever of growth is average order value. What I mentioned earlier is earning buyers trust on the larger as well as smaller purchases, otherwise known as our cushion-to-couch strategy. Most of our efforts here are extensions of other -- right to Win strategies. And in fact, we've only done a few specific things over the years, such as multi-shop checkout and Buy Now, Pay Later, targeted specifically at AOV. We see significant opportunity to invest in cross-category experiences and things like Shop the Look, that we believe could drive big wins here in the future, as well as to give our sellers better tools to showcase the high-quality differentiated product and service so that they can be rewarded for it.
Turning again to frequency and earning a greater share of wallet. We told you on our last call, we're centering our frequency investments on inspiration, having a fun and engaging experience that keeps you coming back for more; efficiency, helping you quickly and easily get in, buy and get out when you already know what you want; and reliability, ensuring a stress-free and dependable purchase.
To the first point, many of our visits are from buyers who are on a discovery journey, and there's so much more we can do to make this a more fun and inspiring experience. Recent buyer survey data revealed that those who visited Etsy just to browse or seek inspiration are 1.3x more likely to say they'll purchase on Etsy in the next three months. Our teams have been hard at work on new discovery pathways designed to make the Etsy experience more visual, dynamic and inspirational for buyers and to elevate the stories our sellers are uniquely positioned to tell.
For example, some of you have seen the beta version of our new Explorer feature on your Etsy app. It's an early iteration of making Etsy a starting point to window shop, discover and connect, a mall-like experience, if you will, featuring a continuous scroll of short videos made by sellers showing their items being made. Etsy sellers are already creating this content for other channels with nearly 15 million seller videos on the site at quarter's end. And buyers are interested in watching this content. It's pretty captivating. We're focused on making Etsy a unique place to build experiences at the intersection of a seller's imagination and a buyer's inspiration. It's early days in this exciting work.
While some buyers come just for fun or inspiration, others arrive already knowing what they're looking for. For those visits, we need to make shopping on Etsy more efficient, less overwhelming and easy to navigate, so you can get what you need and get on your way quickly. We continue to improve search this past quarter by applying personalization to in-session browsing behavior for U.S. searches on etsy.com, capturing a buyer's short-term interests with a particular emphasis on improving conversion for signed out or new buyers.
This connects to my earlier growth lever comment about how we engage the many millions of visitors who come to Etsy but don't become active buyers. We can now increasingly refine our search results while a potential buyer browsers in real time, leveraging signals we gained during the course of the visit to narrow in on today's shopping mission. In the past, we've needed a buyer to have previously engaged with Etsy to be able to personalize their results. This shift opens the door to better address the approximately 75% of etsy.com web visit traffic from buyers who were signed out or have never shopped with us.
We're continuing to innovate our XWalk real-time retrieval engine to not only use billions more data points, but to simultaneously steer our search engine to optimize for specific attributes such as to help a buyer find a high-quality wallet that is brown and full-grain leather and available in time for an upcoming anniversary, as illustrated on this slide. We have enormous conviction that making Etsy a more trusted and reliable place to shop can be a big growth unlock.
Three in five Etsy buyers are unsure we would have their back if something goes wrong with their transaction. Similarly, sellers worry about times when something goes wrong through no fault of their own. And we want them to know that we'll support them. Later this quarter, we'll share our plans for investments in a new purchase protection program that will extend to both buyers and sellers in a generous way. We'll also be doing a lot more in 2022 to further last year's progress towards reducing time to resolution for customer support, ensuring that Etsy Handmade and other policies are enforced helping sellers better manage shipping settings and delivery dates to give buyers the information they need to make purchase decisions and more. We know that in order to gain more wallet share, we need to make Etsy more reliable. We simply can't become a habit unless we do better for our customers.
We have so many other work streams focused on buyer engagement, frequency and trust. In the first quarter, we continued to engage buyers along their Etsy journey by further enhancing our app with new features aimed at increasing purchasing confidence, including driving buyers to reviews, enabling more ways to sort and filter reviews and collecting more review photos. Reviews have been a particularly rich work stream for us. In fact, since 2021, we improved our review rate by 50% globally, which we estimate has driven $200 million in annualized GMS. It's never been more important to be investing to stay top of mind with consumers to keep growing the pie for our sellers.
We're investing even deeper in full funnel marketing to engage existing buyers, reengage our lapsed buyers and keep bringing new buyers to the Etsy marketplace. We've got many new marketing arrows in our quiver this year to better connect off-site and on-site experiences. So I'll just mention a couple about which I'm particularly excited.
The first is our new Creator Collective Program, which leverages influencer and seller-generated content to bring new buyers to Etsy. We've also started to test performance marketing spend in rest of world markets beyond our core, including Italy, The Netherlands, Spain, Ireland, Switzerland, Belgium and Austria. So far, we've seen very encouraging results from these efforts. In the first quarter, approximately 50% of Etsy Marketplace paid GMS for these markets came from new buyers.
As we've talked about, our above-the-line brand campaigns are focused on ensuring we continue to strengthen the Etsy brand in our top core markets, while finding efficient opportunities to expand and scale our reach in ways that will ultimately drive long-term growth. Here's a 30-second clip of one of several brand-new campaigns now running called Live in Original. You'll see us ramping up placements as we go through 2022.
[video playing]
We are emerging from an unprecedented time. And within that, Etsy had unprecedented growth. We expect that this year is going to be unpredictable for us. There are certainly many moving parts both tailwinds and headwinds, which are difficult to forecast. People continue to be nervous about global events and the economy, and we'll have to fight harder for consumers' time and money. Yet we have ample reason to remain optimistic.
We've got a world-class team with the creativity and conviction to invest with purpose on behalf of our seller community. We truly believe we offer something different across every brand in our house and that the size of the prize for Etsy is enormous. It's why I get so excited to come to work every day.
I'll turn it over to Rachel now to take you through the results and provide our outlook.