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Etsy Meets Expectations but Warns on Margins: What Wall Street's Saying


Online handmade goods marketplace Etsy (ETSY) reported its third-quarter earnings on Tuesday, and concerns about the future of the company are growing.

The Brooklyn-based company reported quarterly revenue of $65.7 million, up 37.9% over 2014, but with a net loss of $6.9 million, or 6 cents a share, compared to a loss of $6.3 million in the first quarter of 2014.

Analysts were expecting Etsy to report a loss of 6 cents per share on revenue of $66.2 million for the quarter, according to Thomson One estimates.

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Active buyer growth decelerated to 24.9%, and active seller growth decelerated to 19.4%. Plus the company said next quarter's margins would be lower because of declining Promoted Listing growth (which is high margin), increased Direct Checkout (which is low margin), and increased marketing spend.

Etsy is also facing heightened competition from Amazon's new marketplace for handmade goods, which launched in October.

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"We are looking forward to a great holiday season and are continuing to innovate and build new products and services on our platform that empower Etsy's...