Etsy blames Q1 loss on restructuring

Expenses related to a corporate restructuring led Etsy Inc. to report a huge loss in the first quarter.

Etsy's net loss increased to $36.6 million in the first quarter of fiscal 2015 from $500,000 the same quarter the prior year.Etsy attributed the growth in net loss to non-cash, non-operating expenses related to a global structure it implemented on Jan. 1. Etsy said the revised corporate structure was implemented to more closely align with its global operations and future expansion plans outside the U.S.

"At the end of the first quarter of 2015, the Etsy community included more than 1.4 million active sellers and 20.8 million active buyers,” said Chad Dickerson, chairman and CEO of Etsy. “We made progress down our path to make Etsy an everyday experience, build local marketplaces, globally, offer high-impact seller services, and expand the Etsy economy. We will continue to concentrate on creating long-term value for Etsy and our community, which we believe will result in sustainable long-term returns for our investors."



Total revenue was $58.5 million, up 44% from $40.54 million, driven by growth in Etsy Marketplace and Seller Services revenue. Marketplace revenue grew 27%, primarily due to growth in transaction fee revenue and, to a lesser extent, growth of listing fee revenue.



Seller Services revenue grew 72%, primarily due to growth in revenue from promoted listings, which continued to benefit from the re-launch of promoted listings at the end of the third quarter of 2014. Seller Services revenue also benefited from growth in revenue from direct checkout and shipping labels.



Mobile visits increased from 50% to 58% of all visits. The percent of gross merchandise sales generated by mobile visits grew from 35% to 41%.

Looking ahead, Etsywarned expenses for marketing will rise in the second quarter, and that its sales may be impacted by the rising U.S. dollar.