Etsy, Inc. (ETSY) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Needham's Second Annual Consumer Tech and E-commerce Conference. My name is Anna Andreeva. I'm a senior analyst covering the consumer e-commerce space here at Needham. And next up, we're very excited to have the management team of Etsy. From the company, we have Josh Silverman, CEO; as well as Rachel Glaser, CFO. Welcome, guys. And if anybody listening in has any questions, please feel free to either type those in to your prompt, and we will go through them or alternatively, please e-mail me at [email protected].

Shall I just to jump in real quick with a direction that if you look at Etsy's IR website, you can find Etsy's safe harbor statement, and please refer to that there. And thank you for having us. Nice to be here.

It's great to have you guys. This is a nice tradition. So to kick this off, I'll start with Josh. So Josh, you guys have been talking about driving frequency and loyalty, I mean, really for some time now. And Etsy has made a lot of progress there in the last couple of years. What are the biggest product wins in your view? And what are some of the areas where you continue to see a lot of opportunity in the kind of near to medium term?

Great. Anna, thanks for having us. Appreciate it. We have made a lot of progress. So in 2021, we reported that about half of our buyers bought two or more times and those buyers bought under 5x. And in fact, about 9% of our buyers are habitual buyers, meaning that they bought six or more times. And those buyers actually bought an average of 13x over the course of the 12 months. So, we see a lot of evidence for the fact that Etsy is relevant in many, many purchase occasions. The best loyalty program, great experience that's both great and meaningfully different than everyone else. And so our primary focus continues to be that when you come to Etsy, you have a great experience. And that's what's going to get people coming back. So making search and discovery better. And a big focus within search and discovery in the recent past and will continue to be a big focus in the near future is personalization. We've done a much better job of getting the search results we give you to be more relevant to the key words you've entered. But now we need them to be more relevant to you in your tastes and preferences, and we're early in that journey. And given that so many of our search results have more than 10,000 relevant listings on Etsy, personalization is really important. We're continuing to make a lot of progress on trust. So you've heard us talk a lot in the past about the cost of shipping. We're doing a lot of focus right now on trying to make sure that items arrive on time and that we give you a delivery window that's as pleasing as possible, given the nature of our inventory. We announced Etsy purchase protection just a few months ago in time for the holidays, which gives you even more peace of mind that in the rare occasion that something goes wrong, we've got your back. We're doing more to make Etsy inspiring for people to have really fun and engaging experiences that make you want to come back, things like video on the site that are more of a lean back and fun and engaging experience. So there's a lot that we're doing to make the -- we've done a lot over the past few years to make the experience a lot better. And when you look at why we've held so much of the gain from the pandemic, I think it really comes down to the fact that people were delighted with the experience they got. It was better than many of them expected even and that's got them coming back. But we are still in early days of the opportunity to make further improvements. And the most important thing, I think, for us now is the opportunity to close the consideration gap. So when you ask people where are places you can shop online, particularly in the U.S. and the U.K., more and more people will name Etsy is one of the -- maybe 3 or 4 places they name to shop online. But when you ask them for specific occasions, where do you go to shop for home furnishings, where do you go to shop for jewelry? Very, very few people will name Etsy as one of the first three places. So now attaching Etsy to these very specific purchase occasions, I think there's enormous opportunity for us to continue to grow.

With that in mind, is there a goal that you have established in terms of loyalty? What would be, in frequency rather, what would be a realistic kind of a near-term number with frequency that you think you would be pleased with?

We haven't put out a specific goal on that. You've seen us continue to make meaningful progress. So before the pandemic, about 41% of shopper shops two or more times, now it's 49%. And the shoppers that are shopping two or more times are shopping even more, they're shopping 5x. I think the number of people that are habitual by our six or more times in a year, we could have a lot more habitual buyers. For people who are familiar with Etsy, they shop on Etsy at least once a month, for people who really understand us and understand the value that we provide. There are so many purchase occasions that are relevant to Etsy. And so our opportunity really is to string that together and to get those people to shop a lot more often. We think there's a ton of opportunity.

Okay. The one takeaway from the most recent print to us, at least, was what a good job the company is doing with buyer reactivation. Can you talk about that? What are you doing differently to reengage with those buyers and where do you think they're coming from?

Yes. We have about 100 million, what we call, lapsed buyers. And these are simply people who haven't bought in the last 365 days. And when we go out and talk to them, the vast majority of them have had a great experience on Etsy, think really positively of Etsy, think they've shopped recently on Etsy. And we remind them, no, you haven't been to Etsy in more than a year. And the most common response we get as well, "I just didn't realize, I just didn't think of it." And so again, that consideration gap. If you just sell home furnishings, you can go on TV and just try to associate your brand with home furnishings. If you just sell jewelry, the same thing. For Etsy, you can find virtually anything on Etsy. And so it's a different kind of a marketing challenge. It's creating that habit loop where when you think of these different purchase occasions or when you're in the need, when you're in the market for something, we -- our brand is associated with home furnishings, with jewelry, with gifts, with art, with paper and product, party goods, with pet supplies, with baby products, with wedding goods and on and on and on. And so when you look at our new TV campaign that's just launched recently, you're seeing us try to associate our brand much more specifically with very specific purchase occasions, and we think there's a lot of opportunity there.

Okay. That makes sense. You just recently rolled out purchase protection. And of course, that's a big part of this buyer journey and driving frequency. How is that proceeding versus plan? What are some of the learnings that you can apply from that into next year? And just curious, maybe this is a Rachel's point, which time do you expect purchase protection to be driving GMV?

Yes. I'm happy to start. So a couple of data points I'll point to. First, Overall, we're extremely pleased with the program, and it's going just as well as we had hoped that it would -- it has dramatically lessened the time for -- in the rare occasions when someone has an issue and they file what we call a case, meaning something has gone wrong for the buyer or the seller. It has dramatically shortened the amount of time that it takes to resolve those cases. So by having clear policies and Etsy stepping in to cover the cost in many occasions, we've really made the customer experience for both buyers and sellers a lot better. We also said we thought that the program was going to cost about $25 million a year, and we feel very comfortable that, that's what we thought before. As we are looking at the program now, we continue to think that, that cost is pretty accurate. It's trending right in line. And buyers are liking it. So as we talk about it, as we mention it in checkout, we do see some small uplifts in conversion rate, which is encouraging. In terms of your bigger question, when does it really move the needle? These kinds of programs really mean a lot when you need it, when you encounter it. And as we've been saying all along, the vast majority of buyers actually have a very good experience on Etsy. The reason the program only cost $25 million, when you look at the scale of GMS we do, you see that's a small fraction of a percent of our GMS, it's because buyers generally have a great experience on Etsy. And so they don't often come -- encounter purchase protector because things generally go great. So I think this is one of those things that really helps to support our brand over time, and I think probably over a period of years as people learn more often from friends that Etsy has your back in the rare occasion that something goes wrong.

And I'll pile on just with a quick comment that I think there was a slide in our earnings deck that showed kind of a time line of all the things that we've done as a collection to support that trusted brand that Josh is talking about. We believe that one of the -- Etsy is different in that. We don't have a warehouse of things, and we're not promising. You're going to order your item today and get it tomorrow, and we never will because things are being handmade by millions of sellers. Often when you place the order, it just hasn't been created yet, because it's going to be customized or personalized especially for you with an individual in their home perhaps making this item, and they just don't lend themselves to warehousing, but that creates, for us, a unique problem that we are going to be not speed, not value, not free, a lot of things. So we've done a lot of work over time to close the expectation gap and try to get things not there the next day, but there when somebody is expecting it, get it there as fast as possible reduce, what we call, egregious shipping costs. And this isn't just another one of many things that we've done to kind of close that gap to become closer, to be the best experience a customer can have when it relates to anything post purchase. So you asked what our GMV target is, and we can't give you one and we wouldn't go beyond the guidance we've given for the fourth quarter anyway, but it's something that belongs in a collection of things that help move conversion rate and overall that support one of our pillars of being a trusted brand.

As you think about this ongoing opportunity to be that trusted brand of choice to the consumer, do you think there are other areas whether it's investments or potential tweaks to the experience that are still ahead?

I think there's a lot we can do to make the experience -- continue to make the experience better. So one of the things we talked about on our most recent earnings call is really taking signals of quality and building those more into our search engines. If you go and you look online, if you're a seller, like how do I get more prominent on Etsy? You'll see a ton of tutorials by other people, not necessarily from Etsy talking about how to keyword stuff and SEO optimize your listing. That really does nothing to make the experience better for buyers or sellers. In fact, that's not really the way we want our sellers spending their time. Our search engine is getting better, and better, and better at knowing what your item is and where it's relevant. We want sellers spending their time, making great items, shipping them on time, answering customer inquiries really in a timely fashion. And so building our ecosystem so that it's very clear to sellers what matters. And the better they do at those quality metrics, the better they deliver for buyers, the more prominent they are. That's a virtuous cycle that we're very focused on. So right now, for example, the Star Seller program, which says, if you ship on time, you get five star reviews and you answer customer inquiries quickly, you get a star seller badge. It's a great example of that is a way to support sellers and drive more, drive more prominence. Over time, instead of just matching you with an item you're likely to buy, you want to match you with an item you're likely to love and get better and better at that. And I think there's huge opportunity there. There continues to be opportunity to make sure that others are pricing shipping in the right way. Buyers really expect shipping to be a cost of goods sold, not broken out and large separately. I think there's more opportunity there. There's more opportunity to make sure that we optimize for items that arrive in a timely fashion. So for example, when we have many similar items, prioritizing items that are closer to you so that the shipping time is less more we can do with video to give you a real sense of what this item looks like in a 360-degree perspective and in your home, lots of opportunity. I think we're still in the early days.

I just add one, Josh, on the -- after we launched the Etsy Purchase Protection, we subsequently launched listing level return capability for our sellers to be able to list their return policy, not at the shop level but at the listing level. So you can imagine some sellers sell things that are personalized and that can't be returned, but they sell other items that can be returned, and we weren't giving them the capability to differentiate. That really helps them be able to show a greater percentage of their listings. What's the return policies are, which is all part of that trusted brand you're hesitant to buy something if you don't know if you're able to return it. So that's another -- we're gradually nibbling away at the full problem of, can you return it, who pays for the return? What's the policy on return and all of that.

Okay. Okay. That's terrific. That makes sense. And again, that's part of that buyer education that Etsy is doing. The one question we get often is around GMS per buyer, which is up pretty nicely since before the pre-pandemic days, but it's still lagging that of some of your competitors. So can you talk about that? Where do you see that opportunity? I know generally, you speak to GMS per buyer is more of an output of everything that Etsy does.

Yes. I mean, I think it's a great example. When you talk to people in the United States and the U.K. now, many of them think that Etsy and eBay are about equal. And in fact, GMS per buyer on eBay is multiples of what it is on Etsy. And again, I think it's that brand consideration, first of all, that they just don't think of us as often, it's that I should have had a [indiscernible] moment where after Halloween, they think, oh, would have been better if I got the Halloween costume on Etsy or Thanksgiving happens and they realize, I should have bought that table cloth on Etsy. So we just have a lot of opportunity to drive frequency through consideration first. Second of all, we can do a better job on cross-sell, things like complete the look. You just bought the table cloth on Etsy. Here's four other things that really work to make Thanksgiving work in your house. We're early days of doing -- of getting better and better at that. So our algorithm starting to understand styles and saying the thing you bought is in the following style, and here's other things that are in that style, is, for example, another good opportunity. And the third area is average order value or price. As we earn people's trust more and more, we can start to move from lower ticket items to bigger ticket items that maybe require more trust. And as Etsy's brand is getting a lot more trustworthy, we talk about going from the cushion to the couch. I think that's a big opportunity for us.

And that's a perfect actually segue to my next question. I think the one benefit of Etsy platform is just the breadth of price points and the categories that you have on site, that category diversification at a pretty decent price point overall. And I think on the last call, you talked about home and some of the crafts and supplies, two big categories for Etsy, getting a little bit better, seeing some stabilization there. So can you talk about the category opportunity and just what do you see across the various categories that you play in?

Yes, I agree. It's a big advantage of Etsy. We have such incredible breadth and diversity. And to give some sense, we talked about in 2021, that we had 15 different categories that each had 1 million active buyers, and we had 7 categories that had 15 million active buyers. So one of the phenomenon that I think happened over the pandemic is millions and millions of people had a purchase occasion they needed to buy something, and they couldn't buy it anywhere else so they had to try Etsy. And they found that it really worked great. And now they associate us with that purchase occasion. And for some of them, it's home furnishings, for some it's pet supplies, for some it's bread-making, for some it's gifting, for some it's baby stuff or weddings. Each of them has a category that they now associate with Etsy, but they're all different. And again, our opportunity to string that together is really enormous. We still have been working almost exclusively on horizontal capabilities, meaning we launched something that works for everything all across Etsy. We are beginning, as we look into 2023, to think more seriously about investing in some vertical experiences, meaning like what are some things that you need when you're buying home furnishings that are specific to the of home furnishings. And I think we'll find that there are some areas where building category-specific features are going to be valuable and we're now big enough. We had so much opportunity in these horizontals that it's hard to prioritize anything for a vertical, but home furnishings alone is billions of dollars of sales on Etsy now. So just making home furnishings better, starts to be worth investments in verticals. And I think things like getting the taxonomy and the browse view to be better, as an example, is the kind of thing we're looking at a lot more seriously.

And I just mentioned -- you mentioned the word diversification, Anna. And I think we saw that where during the pandemic, we were seeing these big increases in things like home and living, where people were staying at home and nobody's garden has ever looked as they did during the pandemic as they just -- they have stuff to do while they were stuck in their homes. And so it's stands to reason that when the world is opening up and they're out and about, the home and living category is a little bit -- has more of a headwind facing it. But conversely, we saw a lift in things like fashion and apparel and accessories because people are going back to the office and they need to wear something on the bottom half of them other than the pyjamas bottom. So we're -- that's nice to have that diversification because when something goes down, we have somewhere else where it's up, and so that's been a helpful part of our business model.

And -- that's super helpful. But I think, Josh, with that, your focus now on understanding consumer style, right, to use the word style, and again, playing across categories that could be really valuable into next year as home hopefully begins to stabilize a bit and there are other categories that are uptrending?

Yes. I mean that's a computer science problem that was very difficult until recently, just figuring out what this thing is, whatever table cloth versus a napkin was a really hard computer science problem not long ago. And now we're starting to really be able to understand that. And in fact, to go deeper into things like style. And that for many e-tailers is not that big a deal because they receive a structured data feed from their suppliers that tells them what the product is, what the materials are, what the variations are in terms of colors, what style it is, what may be -- very specifically, what other products it matches with. So their job is just to ingest all of that and then map everything to one master catalog. We don't have a master catalog. Almost by definition, if it maps to a SKU number, it probably doesn't belong on Etsy. And as a result, the computer science problems are very different and often hard on Etsy. But that, we think, is a sustainable competitive advantage. As we get better and better at this, we further separate ourselves from virtually everyone else in e-commerce.

Okay. Terrific. That makes sense. Switching gears to Rachel a little bit about the financials. Can you discuss what's implied in your fourth quarter GMS guidance at the high end and the low end?

Yes. So we gave guidance of $3.6 billion to $4 billion in GMS. And what that implies is that at the high end, we would continue to see stability. So we talked about in the third quarter that we saw a leveling off where earlier in the year, we have seen a pretty steep deceleration. And we saw a leveling off of that deceleration in the third quarter. And in fact, to give an extra data point, we saw that in October, GMS was starting to tick up just a little bit versus the average for Q3. So it's at the high end of the guidance, we assume that we maintain that leveling off, and we're steady. At the bottom end, it implies that consumer discretionary spending is further impacted that there are macro headwinds that keep people away from shopping. The holiday season is very important part of the shopping time for many e-commerce companies, including us and that it would have further impact. And so that's more of a pessimistic view. And given that October really represents only about 20% of our Q4 because November and December are so much more important, it was pretty hard for us to see when we're giving guidance, where in that range that we would -- where we would land.

Okay. That's very helpful. I appreciate that. On the EBITDA guidance, your fourth quarter guide implies a bigger erosion than what you saw in the third quarter. And I know purchase protection is one part of it. Can you talk about what else is embedded?

First of all, I think purchase protection would be a very small part of it because the $25 million we've talked about is an annualized number and relative to our total cost base, it's pretty immaterial. Just to set some context, the biggest parts of our cost base are people costs, marketing and the cloud serving computing like Google Cloud costs. Those are really the 3 big builders of our spend. And everything else adds up, but where we make big changes in marketing, you can see that it has a relatively big impact on bottom line. Most of -- a good percentage of our marketing is dynamic with revenue, and we see a large percentage of that churn in the quarter. But what happens in the fourth quarter where we typically will spend more on marketing because of the holiday season we've been talking about. Some of that has a bottom line impact of contracting margin in the quarter because you're spending to get the future value from it and particularly with brand or above-the-line spend that it has less in-period return than performance marketing, for example. The other thing I'll call out is that, in the second quarter, we did say we were starting to slow our hiring for the balance of the year. But all through 2021 and the beginning part of 2022, we were hiring a pace and now we're seeing all of those, what we call butts-in-seats sitting seats hitting seats, and we're starting to see the compensation impact of those hitting our P&L. And the last thing we called out is that, again, there's about a 400 basis point contraction to the bottom line because of our subsidiary brands. And I think I said this on the call, but I'll say it again just so it's here is that even if those brands were all breakeven, which they're not, it would still be contraction to our bottom line just because their margin structure is lower than Etsy's margin structure. So when you add it in, it works as a contraction to our bottom line.

And I'll just jump in and say 27% EBITDA margin for a company at our stage of growth, where, again, we think we're at the early days of what we can be, we think is appropriate and speaks to the strength of our financial model, particularly when we're so capital light that, that EBITDA usually converts to free cash flow on virtually a one-for-one basis. But we're -- we've always had discipline in our marketing spend that we look at the returns we're getting on the last marginal dollar we spent and make sure that -- we think each dollar we're spending is delivering a good ROI for us. And I felt really great about in the last earnings call, we said that our teams are producing as much GMS, incremental GMS per squad, as they were pre-pandemic even as we've doubled the size of the team. So that speaks to the amount of opportunity ahead. We're often asked, are you out of ideas. And here, our business has doubled. We have carefully and thoughtfully over a couple of years, roughly doubled our team. And each squad is producing as much value on a per squad and per employee basis as they were before. So we think that's super encouraging and we think the investments we're making are really paying off.

For sure, for sure. I guess, Josh, since you mentioned the squads. On the last call, you talked about Depop and Elo7, really starting to make some progress, which is great to see. What are you doing at those two brands to drive that GMS growth and better profitability? And I know there are some learnings certainly from the Etsy playbook, but just curious how you're applying those.

Yes. So Kruti is, I think, maybe six weeks into her role as CEO of Depop, so she's quite new, but she was one of the inventors of that playbook and implementers of that playbook. And so she's certainly bringing it over to Depop as we speak and together with a few other senior executives we put over there. And I think they're really focused on making sure that we convert visits to purchases because in converting visits to purchases, that's the virtuous flywheel that allows you to then spend in marketing and drive growth. And a lot of that, the discipline we've had in product at Etsy around having really high velocity, getting good ideas live quickly with a real focus on measurement, is this new thing we're shipping, driving incremental sales for our sellers. And that Etsy is really good at that, giving teams a lot of freedom, but having them quickly launch good ideas that make the customer experience better that convert in very measurable ways to more sales is a very core discipline and Kruti and the team are really focused on that. And then Calico at Elo7 has been doing some really interesting things around improving the search engine and in consultation with Etsy and providing better shipping rates, shipping prices for buyers, again, with support from Etsy in ways that we're already seeing are measurably improving the customer experience.

That sounds great. So it sounds like nice opportunity into '23 and beyond for both of the subs?

Yes.

Switching gears back to Rachel. So you talked about the hires in the business in the last 12 to 18 months and product development line item has been the fastest growing. And I think last call, you mentioned that the current level, I think it was about 18.2% of your sales is the right one to look into next year. Can you just talk about how we, should we think about these incremental hires that the company has made? And what kind of ROI are you getting on those? And just any sort of initial thinking about the product development line item into next year?

Yes. I think the areas that we can invest for growth -- organic areas that we can invest for growth are really bucketed into marketing and product development. And marketing, we have the ability to turn it on and turn it off pretty easily within a short amount of time. And you saw us do that for marketing during the pandemic period of time where we saw a very large increase in our top line, and we wanted to lean into and take advantage of that period of time. We felt the same about product development, but it takes longer. We're very patient and very picky to get the best talent, and we were competing with lots of large technology companies for the same kind of talent in product and machine learning and data science. And so we turned the spigot on, but we -- it's slower to bring those people to the door and it's slower for them to also hit a learning curve. We don't expect actual impact to top line from the people we hire for, I guess, 9 to 12 months, actually. So it took us quite a while to get them through the door. So when you look at last year, product development was about 12% of our revenue. And this year, it's 18% of revenue. We felt that last year we were a bit underinvested because it was just taking us time to get people through. And this year, it feels about right. That's about the level we would want to be and we can kind of now pace ourselves. That's why we talked about slowing the hiring in the second quarter pace ourselves relative to our top line growth, leaning in when we feel like the top line is accelerating or pulling our fire a little bit when we think the top line is soft. As far as -- Josh talked already about the ROI per squad, we do measure the squads. In fact, we measure not only the people, but we load them up with the serving cost from the development costs that the demand they place on the cloud computing. We load that all up. And these squads become ROI positive. We look for them to be within a 2-year period. Oftentimes, they're breakeven within the first -- within the first year.

Okay. That's very helpful. Can you talk about just the philosophy of the transaction fee increase that you've had? I know you've spoken publicly that there really hasn't been much of a negative feedback from the seller base at all, which -- that's great to see. But do you think there could be additional opportunities at the subs as we look out the next couple of years?

Yes. Let me start, and maybe Josh wants to pile on. So first of all, I don't think we said there was no negative feedback because sellers -- sellers don't want to have -- say like base increases. I think the benefit of being a marketplace is that we have a vantage point that no individual seller has, which is we could see what the buyers need. So we've -- you've seen us put things in place like moving towards being able to say free shipping eligible for orders over $35. We knew buyers wanted to see that and that was some pain we place on our sellers. And we're taking a trend -- just a straight transaction fee increase. It feels like, hey, we're -- Etsy is taking more money out of their bottom line, but what we're actually doing is reinvesting that transaction fee in more marketing because we know that that's going to benefit ultimately overall the entire marketplace that we can get more buyers through the top of the funnel, which creates more GMS for sellers and ultimately, it's a better gross margin for them when we can do that. But in the moment, sellers don't love it. And even in this last one that we did, we did see a fair bit of. I think it was more than bite where a small group of sellers made some noise and ultimately, that evened out. And we say that every time we've done any kind of transaction increasing, we braced for it and we expect it. And I think it's been there, but less bad than we planned for. So that's what we say. We've done a take rate increase almost every year since we've been a management team, not transaction fee increase, but some form of a take rate increase. So for example, when we launched Offsite Ads, that was effectively a 1% take rate increase. And that's another example of something that really benefited sellers to success fee-based thing that they don't pay unless they had a successful sale. And we've seen, for instance, expansion of Etsy Payments, which also ends up being higher transaction fees for them, but we see the buyers that their purchase goes through Etsy Payments, there's higher conversion rate when sellers are using Etsy Payments when that went on. So that's all to say, I don't know. We've never been dogmatic about. We will always take a transaction fee or a take rate increase every year or you will never do one again. We look for that opportunity to have where we can add value to the marketplace where it's going to be good for the sellers, good for the buyers and good for Etsy. And we haven't announced anything, of course, but that's the way. Internally, we look at that value exchange as the guiding principle about when we would take pricing.

And I know you were asking about the subs.

Yes.

I'll just pile on just real quick to say that, look, doing a take rate increase in the beginning of this year was not popular among sellers. And yet, we think it's been a really key part of why our sellers have maintained their sales so well this year. And so having an extra 1.5% in exchange for, on average, sellers holding their sales much better than many during a tough retail environment, we think was a great trade for sellers and was in their best interest. And so we always try to do that. We're also not dogmatic. And each of the subsidiaries has its own set of market dynamics that it's facing. And what does that value exchange look like? And where are they in their life cycle? And -- so just because Etsy does something in the core marketplace doesn't mean that necessarily Depop or Elo7, we'll do the same.

Okay. Okay. Got it. We have a question from somebody listening in. I think this is more a Rachel question. This is regarding the cash flow. The cash flow -- the cash building certainly on the balance sheet and likely that's going to continue to be the case, given just the favorable dynamics right of the cash flow generation of the business. Any learnings from the '21 acquisitions that may inform your plans on M&A going forward?

I think it's just as much for Josh is for me, as the guardian of the money, I'll start first. Yes. I mean we feel very high conviction in the acquisitions that we've made, great business opportunities both in the what we internally call the e-commerce space, the fashion e-commerce space, large market, pretty underpenetrated, good extension to a TAM that we're already in and then entry into the very, call, rich Latin American market with 7 in Brazil. Lesson learned for everybody, don't invest right at the tail end of a pandemic or the beginning of a large global geopolitical conflict because I think the macro factors really hit us and we buy high. And in hindsight, we wouldn't have paid -- doing those transactions, again, those are the prices we wouldn't have paid. But we're nevertheless, pretty excited about those opportunities. We've got a new management team in Depop with really been experience and starting to do a hard look at what their vital few are with Etsy has its vital few and pivot to some exciting new resource allocation investment in product and other areas.

Yes. We take really seriously our responsibility as stewards of capital. If you look back over our history, the Blackbird acquisition, we think worked great. The DaWanda acquisition, we think worked great. We got a lot of value even out of a little market ALM, which we bought in France. We feel really good about Reverb. And then we like Depop and Elo7 a lot. And we're really happy we own the company, but we bought it at the wrong time, and we acknowledge that and $1 billion write-off is not something we take light -- serious and I understand shareholder concern around that, and we want you to know that, we take that seriously. We also think about our capital, our share repurchase. We work hard to offset the dilution from employee stock option grants through share repurchases and actually Rachel, I just look back over the five years of our tenure. And the ROI from our share repurchase program has also been very friendly for shareholders, even including the 2021 -- 2020 and 2021 share repurchase program. So we work hard to be good stewards of capital, and we'll continue to do so.

Okay. I think on this note, we are out of time. This is a great place to end. Thank you, everyone, for listening in. Thank you, Etsy, for participating. This was great, and happy holidays, everyone. Happy Thanksgiving.

Thank you, Anna.

Thanks for having us.

Yes.

Thank you.