Keep commerce human. Investor Presentation August 2020
2 This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking Forward-looking statements include statements relating to our financial guidance for the third quarter of 2020 and key drivers thereof; the impact of our investments on topline growth the uncertain impacts that the COVID-19 pandemic may have on our business, strategy, operating results, key metrics, financial condition, profitability, and cash flows and changes in overall level of consumer spending and volatility in the global economy.. Statements Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “may,” “plans,” “will,” “intends,” or similar expressions and the negatives of those words. Forward-looking statements involve substantial risks and uncertainties that may cause actual results to difger materially from those that we expect. These risks and uncertainties include: (1) risks related to the ongoing COVID-19 pandemic, which continues to impact our GMS, other key metrics and results of operations in numerous ways that remain volatile and unpredictable; (3) our failure to meet our publicly announced guidance or other expectations; (4) our ability to successfully execute on our business strategy or if our strategy proves to be inefgective; (5) our ability to attract and retain an active and engaged community of sellers and buyers; (6) our ability to maintain our growth; (7) macroeconomic events that are outside of our control; (8) our ability to recruit and retain employees; (9) the importance to our success of the trustworthiness of our marketplace and the connections within our community; (10) our ability to enhance our current ofgerings and develop new ofgerings to respond to the changing needs of sellers and buyers; (11) the efgectiveness of our marketing efgorts; (12) the efgectiveness of our mobile solutions for sellers and buyers; (13) our ability to expand our business in our core geographic markets; (14) regulation in the area of privacy and protection of user data; (15) our dependence on third-party payment providers; (16) acquisitions that may prove unsuccessful or divert management attention, including our acquisition of Reverb; and (17) the potential misuse or disclosure of sensitive information about members of our community and the potential for cyber-attacks. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission, including in the section entitled “Risk Factors” in our Quarterly Report for the quarter ended March 31, 2020, and subsequent reports that we file with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to difger materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. Forward-looking statements represent our beliefs and assumptions only as of the date of this presentation. We disclaim any obligation to update forward-looking statements. This presentation is a high-level summary of our Q2 2020 and financial results. For more information please refer to our press release dated August 5, 2020 and filings with the SEC.
Etsy’s Value Proposition 1 2 3 Significant early stage opportunity to One of a kind platform ofgering Successfully executing a own “special” and capture a greater unique handcrafted goods from long-term growth strategy share of a very large and growing TAM creative entrepreneurs around the focused on our Right to Win world 4 5 6 Leveraging our strong brand awareness Flexible business model, delivering A gile team, able to execute successfully with marketing initiatives to drive strong top and bottom line operating & through an extraordinary time to support frequency and growth financial performance our global community
1 One of a kind platform ofgering unique handcrafted goods from creative entrepreneurs around the world
Our marketplaces have two-sided vibrancy... Sellers Buyers 60.3 Million* 3.1 Million* Active Buyers Active Sellers *Results are Consolidated as of June 30, 2020 and include Reverb buyers and sellers.
Etsy connects those who love unique, handcrafted and Personalization difgerentiated goods Made to customer specification Product Range Large assortment of unique, original and vintage products from all over the world Categories Unique goods listed across dozens of retail categories Buyer Intent People come to Etsy to browse and be inspired
In a survey of Etsy buyers, 88% agreed that Etsy has items you can’t find anywhere else *2019 survey of Etsy buyers
In a sea of sameness, we ofger something unique... fun self-expression everyday ≠ special commodities human personal
2 Significant early stage opportunity to own “special” and capture a greater share of a large and growing TAM
How we built our total available market opportunity in March 2019 2018 TOTAL RETAIL AND ONLINE TAM 2018 $ 1.7T 6 core geographies Across all relevant retail categories $ 249B Expanded to include online spend $5B in ALL relevant retail categories Top Geographies: and core geographies United States United Kingdom 2019 Global GMS Canada ~ $ 100B Germany Etsy Estimated Australia Market Share: → France ~5% Market for “Special” Sources: Euromonitor (2018), Assoc. for Creative Ind. (Jan 2018), Art Basel (2018), Hiscox (2018), IBIS, Etsy Consumer Survey
COVID-19 challenged all of these assumptions - Etsy is not a niche marketplace: we believe our TAM starts with a “T” and not a “B” 2018 Many things count as Distinction between Buyers and sellers “Special” - injecting in every country offline and online has ‘Joy into the around the world meaningfully changed Everyday’
3 Successfully executing a long-term growth strategy focused on our Right-to-Win
Disciplined and focused long-term growth strategy 1. 2. Focus on the core Etsy marketplace Build a sustainable competitive advantage in our 6 core geographies around four key elements Best-in-Class Human A Trusted Search and × × Connections Brand Discovery United States Our Collection of Unique Items United Kingdom Canada Germany Australia France
14 New product development aligned with our Right to Win Best-in-Class Search Human A Trusted and Discovery Connections Brand ✕ ✕ Q2 Ex: Improved Saved Q2 Ex: Seller Listing Videos Q2 Ex: Free Shipping Bundles Searches and Favoriting Our Collection of Unique Items Q2 Ex: Augmented Reality 14
4 Leveraging our strong brand awareness with marketing investments to drive buyer frequency and growth
Our buyers love Etsy, but many have traditionally only shopped once a year... 46 Million* 60 + NPS score among recent purchasers 2 59% 1x/year 1 *Active buyers for Etsy marketplace includes Reverb and were approximately 46.4 million, as of December 31, 2019. 1 Percent of buyers who have made purchases on only one day in the previous 12 months, as of December 31, 2019. 2 Net Promoter Score for recent purchasers in Jan 2020 Etsy buyer survey; recent purchasers defined as having made purchase within past 30 days of answering survey.
And while millions love us, they don’t know when to think of us... Prompted Awareness 84% 41% Unprompted Awareness 29% Visit Intent (Consideration) 23% Purchase Intent 27% Loyalty 25% Advocacy Etsy Brand Funnel: U.S., Q4 2019
18 We are moving our marketing investments to “full funnel” strategies; focused on delivering positive ROI Positive impact from TV; making other channels work harder Content Affiliates Progress unlocking positive ROI FULL-FUNNEL social channels - i.e. through MARKETING re-targeting Natural shock absorber that varies dynamically with demand. More effjcient performance marketing - more sophisticated bidding, feed improvements
Etsy is bringing Joy to the Everyday Etsy has everyday items that not only meet your functional needs, but also bring joy to your everyday life through quality/careful craftsmanship that lasts, beautiful design that reflects your unique style and the ability to personalize/customize items just for you/those you love
20 Improving the marketplace... and telling the world about it Etsy ‘Everyday Finds’ TV Campaign CRM Initiatives • Creating segments and targeting buyers with more personalized messages • Doubling down on recent purchasers to drive repeat buys within 14 days • Deepen engagement and buyer loyalty
21 5 Flexible business model, delivering strong top and bottom line operational and financial performance
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