Brooklyn-based crafts vendor Etsy reported earnings for its fiscal first quarter on Wednesday, missing revenue targets by a hair. The company posted a Q1 net income of $31.6 million, or a 26 cents a share, compared to a net loss of $12.9 million, or a penny a share, the year prior.
Non-GAAP earnings were 24 cents a share on revenue of $169.34 million, up 40% from the previous year. Wall Street was expecting earnings of 14 cents a share on revenue of $170.06 million million. Shares of Etsy dropped more than 5% in after hours trading.
Etsy said revenue growth was driven by both Marketplace and Services revenue. Another positive barometer for the company is its Gross Merchandise Sales (GMS), which increased by 18.9% to $1.02 billion. Etsy ended the quarter with 41 million active buyers, up from 34 million in the first quarter of 2018.
Etsy also gave an update on its Google Cloud migration, noting that it began servicing search traffic through Google Cloud during Q1. The migration is expected to be completed in early 2020, the company said.
"During the first quarter of 2019 we temporarily paused some of our marketing investments in order to closely test incrementality of our less mature channels and refine our attribution models," said Etsy CFO Rachel Glaser. "Profitability in the quarter was especially high because of this marketing recalibration. We expect to leverage our insights, while continuing to test new channels, including television, to maximize growth and profitability."
Looking ahead, the company narrowed its fiscal 2019 revenue outlook to the range of $785 million to $797 million, compared to the previous range of $779 million to $797 million.