Etsy CEO Josh Silverman joins Yahoo Finance Live to discuss the company's earnings, its reinvestment in the platform, raising fees, and attracting male users with NFL ads.
JULIE HYMAN: Etsy reported after the close of trading last night. And the company, as you can see, came in above estimates. In particular, that revenue number is a 16% increase to $717 million. Also gross merchandise volumes rose by 17% to about $4.2 billion. The shares up by a little under 7% at the moment.
Josh Silverman is joining us now. He is the CEO of Etsy. It's good to see you, Josh. We have talked with you in the past during the pandemic about mask sales and how big they were on Etsy. Obviously, that's less of a factor for you guys right now. And so I'm curious, in the quarter, as you continue to see momentum, even with that huge push, where now a lot of the strength is coming from.
JOSH SILVERMAN: Yeah, so true, masks are now less than 2%. But the tremendous variety of things for sale on Etsy is a huge strength of ours. There's over 100 million things for sale on Etsy in almost every category. So our largest category has been home furnishings. And you won't be surprised to hear that home furnishings is about flat year over year. People have spent the last two years sprucing up their home. And with interest rates rising, probably people will be buying fewer new homes or moving into new homes for the moment.
But weddings are up in the mid 20% year over year. And I think people are excited to get out of their house and start gathering again. And so the ability to participate in many different categories, we think, is a real strength of the vibrancy and the size of our market.
JULIE HYMAN: Yeah, that is definitely interesting about weddings. And it is interesting how the product flow kind of mimics what's going on in the outside world, obviously. Something else I wanted to ask you about is you guys, like many other companies, are raising prices. In your case, specifically, it's the base transaction fee, which is going to 6 and 1/2% from 5%. What was interesting to me, Josh, is you didn't talk so much about inflation pushing that change. It's that you guys are reinvesting in the business. So talk to me about how you made that decision and where that money is going.
JOSH SILVERMAN: Yeah, we always think about our fees in terms of a fair exchange of value and making sure that we are the best value for our sellers. And we think that 6 and 1/2% as a commission is fair. Etsy now has 90 million active buyers. And sales per seller grew by 23% last year alone. The number of sellers on our platform has more than doubled since the start of the pandemic. Last time we raised fees in 2018, Etsy was spending about $70 million a year on advertising. Last year, we spent $500 million a year on advertising.
And so what our sellers are asking us to invest in is marketing, service, and product. So we're going to spend more than $600 million this year on marketing. We're investing significantly in service to make buyers and sellers able to work within our platform in a really worry-free way. We spent more than $100 million on service last year, and doing things like having a live phone support and chat support for buyers and sellers and also making sure we're really enforcing our policies around things like the handmade policy, so we have a level playing field for all of our sellers and deliver on our brand promise for buyers.
And on the product side, investing to make sure that search and discovery is really world class, that things like reliability of the platform work. We mentioned in this earnings call that the work we did on product last year, just last year, added over a billion dollars of incremental sales for our sellers through the efforts of our product and engineering team. So those are the examples of where we plan to reinvest in our sellers.
BRIAN SOZZI: Josh, you shared a stat on the call last night that took me by surprise. You noted consumers that identify as male, 50% of them have never heard of Etsy. Why is that the case? And what are you doing on the platform to get their business?
JOSH SILVERMAN: It's a great point. I'm really glad you raised it. We have always been a female-led company. Over 80% of our sellers identify as women. About 80% of our buyers identify as women. And as we looked at our opportunities going forward, we realized we've never really tried to speak to men. And there's tremendous amounts of merchandise on our platform that are great for men.
And so we're now starting to merchandise more directly to men. We're starting to advertise in channels where men are a bigger part of the viewership. So for example, you're starting to see Etsy advertisements in the NFL. And we're seeing great response from men. So we think it points to there's still a tremendous opportunity, and it's early days for Etsy overall.
JULIE HYMAN: And how big of an opportunity do you think that that could be? I mean, if it's something that you haven't really ever put a lot of effort into, now you're putting the effort into it. Men are a big market. I mean, have you guys put any sort of modeling around what that could do for sales?
JOSH SILVERMAN: We have. Obviously, men is about 50% of the US population. Women control more of the wallet in terms of consumer spending. And so we think it's a big opportunity. We also think international is a very big opportunity. We're really investing in a few select international markets like the UK, France, Germany, and Canada. But it's a big world out there. And we've been planting seeds in the UK for a number of years.
The UK is now four times as big as it was before the pandemic. I mean, we've seen an explosion of growth in the United Kingdom. It's a great example of the seeds we've been planting, growing into a huge forest almost overnight. And we think that opportunity exists in many markets outside the United States.
BRIAN SOZZI: Josh, your first quarter outlook or your guidance, your outlook for the company, does it incorporate anything, consumers pushing back or resistance to any price increases from sellers?
JOSH SILVERMAN: We guided to 5% growth for Etsy consolidated for the first quarter. And that's about holding flat year over year for the core Etsy marketplace, not including our subsidiaries. What we think is remarkable about that is if we think about this time last year, Etsy grew 132% year over year this quarter last year. And that's among the highest growth rates any public e-commerce company has published ever.
And that was hugely benefited from things like stimulus checks that were coming out this time last year and lockdowns. If we remember one year ago, there were severe lockdowns in many parts of the United States, and in fact, many parts of the world. And Etsy was obviously a huge beneficiary of that as there were very few other places you could go to shop.
This year, the world looks very different. There's no federal stimulus. And in fact, almost every shop is open and operating. And yet people are choosing to come back to Etsy again and again. So maintaining all of the gains that we had from this time last year, we think is a really fantastic signal of the durability of the benefit that we've seen and what we offer to people that makes them want to come back again and again.
JULIE HYMAN: And Josh, finally, before I let you go, I would be remiss if I didn't ask about Ukraine and Russia and what's going on. And I was thinking back to the early days of the pandemic. I actually ordered something off of Etsy from a former colleague of mine who's Ukrainian-American, and it was sort of her family shop. So even though she's not based in Ukraine, she obviously has ties to Ukraine still. And so I'm wondering what the sort of direct and indirect effects are that you're thinking about.
JOSH SILVERMAN: Thanks for asking. It's obviously an incredibly sad moment for all of us with really far reaching effects. And we absolutely have sellers in the Ukraine and in Russia. But in fact, about 2% of sales on Etsy come from Ukrainian sellers, another 1% from Russian sellers. And they do a great job delivering artisanal products that delight our customers.
In fact, we have some ceramic bowls that just arrived from a seller in the Ukraine. And they're beautiful. And so our hearts go out to everyone that's impacted. We want to do everything we can to support our sellers in that region, who are just trying to make a living and provide for their family, like anyone else. And of course, we're going to respect sanctions from the US and Europe and do everything we need to do to comply with the law.
JULIE HYMAN: Josh, it's great to see you this morning. Thank you so much for taking the time to talk to us. Josh Silverman, CEO of Etsy.