Etsy posts Q4 revenue increase, shares spike after market

Online artisanal marketplace Etsy had a rough 2015 capped off with a mixed Q4, yet the company still enjoyed a surge in share prices Tuesday after showing a quarterly increase in revenue.

The Brooklyn-based crafts vendor posted a Q4 net loss of 4 cents a share, or $4.23 million (statement).

Non-GAAP earnings were five cents a share on revenue of $87.9 million, up 35 percent from the previous quarter.

Wall Street was expecting an earnings loss of a penny a share on revenue of $86.7 million.

Etsy's shares spiked as much as 13 percent in after-hours trading following the report.

For the year, the company reported a loss of $54.1 million, or 59 cents per share, on revenue of $273.5 million.

Analysts were bracing for a loss of 56 cents a share on revenue of $272 million.

Etsy credits integrating PayPal and the rollout of promoted listings for the revenue boost. Another positive barometer for the company is its Gross Merchandise Sales (GMS), which rose 21 percent in Q4 compared to the year prior.

Etsy ended the year with 24 million active buyers, up from 20 million in 2014. In some ways, the increase in active buyers helps ease concerns over possible competition from Amazon Handmade, the e-commerce giant's own specialized marketplace for handicrafts launched last year.

"Our overall GMS growth accelerated as we moved through the holiday season in November and December is evidence of the successful brand campaign," said Etsy CEO Chad Dickerson, on a conference call with analysts. "For the first time ever, we ran a global holiday campaign that featured merchandised pages and gift guides across key categories and was coordinated across mobile apps, desktop and global web."

Looking ahead, Etsy expects GMS to grow between 13 percent and 17 percent over the next three years, with revenue growth between 20 percent and 25 percent.