Q1 2018 Financial Results May 8, 2018 Forward-looking Statements - PowerPoint PPT Presentation

Q1 2018 Financial Results May 8, 2018

Forward-looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward- looking statements include statements related to our business strategy, market size, f inancial guidance and key drivers thereof, the impact of our focus areas and key initiatives, our product launch roadmap and potential future growth. Forward-looking statements include all statements that are not historical facts. In some cases, forward- looking statements can be identi f ied 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 di ff er materially from those that we expect. These risks and uncertainties include: (1) our history of operating losses; (2) the f luctuation of our quarterly operating results; (3) our ability to implement our business strategy; (4) our ability to attract and retain an active and engaged community of Etsy sellers and Etsy buyers; (5) macroeconomic events that are outside of our control; (6) our ability to recruit and retain employees; (7) the importance to our success of the trustworthiness of our marketplace and the connections within our community; (8) our ability to enhance our current o ff erings and develop new o ff erings to respond to the changing needs of Etsy sellers and Etsy buyers; (9) the e ff ectiveness of our marketing e ff orts; (10) the e ff ectiveness of our mobile solutions for Etsy sellers and Etsy buyers; (11) our ability to expand our business in our core geographic markets; (12) regulation in the area of privacy and protection of user data; (13) our dependence on third-party payment providers; and (14) the potential misuse or disclosure of sensitive information about our members and the potential for cyber-attacks. These risks and uncertainties are more fully described in our f ilings with the Securities and Exchange Commission, including in the section entitled “Risk Factors” in our Annual Report on Form 10 - K for the year ended December 31, 2017, and subsequent reports that we f ile. Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements. This presentation is a high-level summary of our Q1 2018 f inancial results. For more information please refer to our press release dated May 8, 2018 and f ilings with the SEC 2

Q1 Key Accomplishments and Highlights Accelerated GMS and Revenue Growth with stable margins 1 Improved buyer experience driving conversion rate gains 2 Created efficiencies from key foundational investments 3 4 Executed a $345 Million Convertible Debt Offering 5 Repurchased approximately $70 Million of Etsy shares 6 Raised 2018 guidance for GMS, Revenue and Adjusted EBITDA Margin 3

Our Strategy Continues to Yield Strong Financial Results GMS 
 Adjusted EBITDA* 
 Revenue 
 Net Income 
 $861M $121M $13M $26M $0.10 EPS 1 +19.8% Y/Y +24.8 % Y/Y 21.9% margin +17.6% Y/Y (FX adj.) GMS Growth Revenue Growth Adj. EBITDA Margin* 19.8% 24.8% 25.6% 23.6% 17.8% FX - Neutral 21.5% 21.9% 21.4% 19.1% GMS 17.6% 18.4% 14.2% 13.2% 11.8% 12.5% 10.0% 1Q17 2Q17** 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 FX - Neutral GMS As-Reported GMS *Reconciliation of non-GAAP f inancial measures is contained in the Appendix. 4 **Revised to re f lect the correction of an immaterial error 1 EPS re f lects diluted earnings per share, basic EPS is $0.11

Etsy’s Virtuous Marketing Cycle Improved experience Higher LTV enables more Leads to a higher conversion rate for new and repeat buyers marketing spend Leads to a higher LTV 5

2018 Balanced Portfolio of Investments Foundational Immediate Longer Term ~20% ~60% ~20% Examples: Examples: Examples: • Help Center • Search & Discovery • Discovery • Google Cloud • Trust & Reliability • Machine Learning • Technical Debt • Marketing Capabilities • Engagement • Seller Tools and Services Focused on foundational investments, incremental growth initiatives and longer term projects 6

Foundational Investments Support our Product Roadmap • More agile development infrastructure to maintain velocity • Streamlined code base to improve page load times • Focus on improved operational efficiency and use of resources • Enhanced experience for buyers and sellers • Faster processing speed and page load times • More nimble capacity utilization • Data and privacy transparency, accountability and security for our community 7

Delivering on our Four Key Initiatives Trust & Search & Reliability Discovery Seller Tools Marketing & Services Capabilities We estimate product enhancements launched in Q1 will generate over $75M in annualized GMS 8

Search & Discovery: Helps Buyers Find “Special” Context Specific Ranking Promoted Listings for a “wedding dress” search without CSR Promoted Listings for a “wedding dress” search with CSR 9

Trust & Reliability: Relieves Friction in the Buying Process Guest Checkout Scarcity Signals New Structured Return Policy Free Shipping Filters Scarcity Badges 10

Marketing Capabilities: Unique Inventory “Made With Love” 11

Seller Tools & Services: Enable our Sellers to Drive Growth Targeted Offers Custom Orders 12

Q1 Results Highlight Improvements in the Product Experience GMS Growth (y/y) Revenue Growth (y/y) Adj. EBITDA Margin* Consecutive quarters of accelerated growth Solid Adjusted EBITDA margin Consecutive quarters of accelerated growth 24.8% 25.6% 19.8% 23.6% 21.5% FX - Neutral 17.8% 21.9% 21.4% 19.1% GMS 17.6% 18.4% 14.2% 13.2% 11.8% 12.5% 10.0% 1Q17 2Q17** 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 FX - Neutral GMS As-Reported GMS Focused on initiatives that we believe have the highest probability of driving growth *Reconciliation of non-GAAP f inancial measures is contained in the Appendix. 13 **Revised to re f lect the correction of an immaterial error

New Revenue Categories: Marketplace & Services Marketplace Services $33M, up $88M, up 35.0% 24.7% 27% Services Revenue Marketplace Revenue (Required) (optional) • Listing Fee • $0.20 listing fee per item • Promoted Listings • Transaction Fee • 3.5% transaction fee on goods sold • Etsy Shipping Labels 73% • Etsy Payments • 3 - 4% + a f lat fee charged in local currency • Pattern by Etsy • 2.5% - 5% fee for foreign currency transactions 14

Condensed Consolidated Statement of Operations 1Q18 1Q17 (in thousands) Revenue $120,912 $96,891 Cost of revenue 41,295 34,659 Gross pro f it 79,617 62,232 Marketing 26,194 23,454 Product development 20,721 18,116 General and administrative 18,904 22,763 Operating expenses 65,819 64,333 Income (loss) from operations 13,798 -2,101 Other (expense) income, net (817) 628 $12,967 ($421) Net income (loss) Net income (loss) per share — diluted $0.10 $0.00 15

Convertible Debt Transaction Launch Date: March 8, 2018 Issue: Convertible Senior Notes due 2023 Offering Size: $300 million Greenshoe: $45 million Ranking: Senior unsecured Maturity: 5 years Coupon: 0% Conversion Premium: 37.5% Concurrent Stock Repurchase: $42 million, 1.6 million shares Use of Proceeds: Capped call transactions, general corporate purposes Leveraging the strength of our balance sheet for long-term growth investments 16

Full Year 2018 Guidance 2018 Original Guidance 1 2018 Revised Guidance 1 GMS Growth 14 - 16% 16 - 18% ~$3.7B - $3.8B ~$3.8B - $3.84B Revenue Growth 21 - 23% 22 - 24% ~$534M - $543M ~$538M - $547M Adjusted EBITDA Margin* 20 - 22% 21 - 23% ~$108M - $118M** ~$114M - $125M** * Reconciliation of non-GAAP f inancial measures is contained in the Appendix. ** Based on the mid-point of 2018 revenue guidance 1 Original guidance issued on 2/27/2018 and revised guidance issued on 5/8/2018 17

Appendix 18

Condensed Consolidated Balance Sheets 1Q18 4Q17 (in thousands) Cash and cash equivalents $533,855 $315,442 Short-term investments 67,526 25,108 Property and equipment, net 116,385 117,617 Accounts receivable, net 31,292 33,677 Other assets 121,107 113,739 Total assets $870,165 $605,583 $8,094 $13,622 Accounts payable Facility f inancing obligation 60,041 60,049 Long-term debt, net - 265,415 Other liabilities 152,128 135,018 Total liabilities 485,678 208,689 Total stockholders’ equity 384,487 396,894 Total liabilities and stockholders’ equity $870,165 $605,583 19