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ETSY, Etsy Inc.

Commercial Services & Supplies asset-light Cyclical

About our Company Etsy op erates two-sided online marketplaces that connect millions of creative entrepreneurs with buyers around the world.

We see lasting value in businesses that balance people, planet, and profit, and we strive to align our growth strategy with this principle—using our platform to foster entrepreneurship and sustainable economic impact.

The Etsy marketplace is the global destination for unique, creative goods from independent sellers, connecting artisans with thoughtful consumers seeking items that reflect their tastes and values.

Latest annual: FY2025 10-K

ETSY · Etsy Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$2.9B

+2.7% YoY · 11% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $2.9B 5-yr avg $2.7B

Gross margin 72% 5-yr avg 71%

Operating margin 13.4% 5-yr avg 5.5%

ROIC 47% 5-yr avg 13%

Owner-earnings margin 25% 5-yr avg 26%

Free cash flow margin 25% 5-yr avg 26%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Marketplace revenue (70%) and Services revenue (30%).
Situation: Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 70% and operating margin about 10% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from −26% to 25% — on a steadier 70% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. The cash cycle has run negative through the cycle (a median of −11 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run high across the record (median 24%, above 15% in 6 of 9 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 26% of revenue reaches owners as cash, consistently, and customers and suppliers fund the business through negative working capital. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Marketplace revenue is 70% of revenue, with Services revenue the other meaningful line at 30%.

Revenue by product line, FY2025

Marketplace revenue70%$2.0B
Services revenue30%$876M

By geographyUnited States51%All Other39%United Kingdom10%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$365M	$441M	$604M	$818M	$1.7B	$2.3B	$2.6B	$2.7B	$2.8B	$2.9B	$2.9B	RevenueRevenue
66%	66%	68%	67%	73%	72%	71%	70%	72%	72%	72%	Gross marginGross mgn
24%	21%	14%	15%	9%	12%	12%	12%	13%	12%	11%	SG&A / revenueSG&A/rev
15%	17%	16%	15%	10%	12%	16%	17%	16%	16%	15%	R&D / revenueR&D/rev
$18M	$12M	$75M	$89M	$424M	$466M	($659M)	$280M	$380M	$266M	$390M	Operating incomeOp. inc.
4.8%	2.7%	12.4%	10.8%	24.6%	20.0%	−25.7%	10.2%	13.5%	9.2%	13.4%	Operating marginOp. mgn
($30M)	$82M	$77M	$96M	$349M	$494M	($694M)	$308M	$303M	$163M	$285M	Net incomeNet inc.
—	—	—	—	5%	-5%	—	-5%	26%	34%	24%	Effective tax rateTax rate
											Cash flow & returns
$48M	$69M	$199M	$207M	$679M	$652M	$684M	$706M	$752M	$693M	$725M	Operating cash flowOp. cash
$23M	$27M	$27M	$48M	$58M	$74M	$97M	$91M	$108M	$102M	$100M	DepreciationDeprec.
$55M	($66M)	$56M	$19M	$206M	($56M)	$1.1B	$22M	$58M	$184M	$99M	Working capital & otherWC & other
$36M	$4M	$1M	$8M	$1M	$11M	$10M	$13M	$14M	$15M	$14M	CapexCapex
9.9%	0.9%	0.2%	0.9%	0.1%	0.5%	0.4%	0.5%	0.5%	0.5%	0.5%	Capex / revenueCapex/rev
$25M	$65M	$198M	$199M	$678M	$640M	$673M	$693M	$738M	$678M	$711M	Owner earningsOwner earn.
7.0%	14.8%	32.8%	24.4%	39.3%	27.5%	26.2%	25.2%	26.3%	23.5%	24.5%	Owner earnings marginOE mgn
$12M	$65M	$198M	$199M	$678M	$640M	$673M	$693M	$738M	$678M	$711M	Free cash flowFCF
3.3%	14.8%	32.8%	24.4%	39.3%	27.5%	26.2%	25.2%	26.3%	23.5%	24.5%	Free cash flow marginFCF mgn
$8M	$0	$0	$270M	$0	$1.7B	$0	$0	—	—	$0	AcquisitionsAcquis.
$0	$10M	$135M	$177M	$269M	$303M	$426M	$577M	$724M	$777M	—	BuybacksBuybacks
—	15%	24%	12%	72%	22%	-64%	34%	39%	36%	47%	ROICROIC
-9%	21%	19%	24%	47%	79%	—	—	—	—	—	Return on equityROE
−9%	21%	19%	24%	47%	79%	—	—	—	—	—	Retained to equityRetained/eq
											Balance sheet
$182M	$315M	$367M	$443M	$1.2B	$780M	$921M	$914M	$811M	$1.4B	$1.2B	Cash & investmentsCash+inv
$26M	$34M	$12M	$15M	$23M	$27M	$28M	$25M	$9M	$9M	$9M	ReceivablesReceiv.
$11M	$14M	$27M	$26M	$41M	$28M	$29M	$30M	$26M	$29M	$15M	Accounts payablePayables
$15M	$20M	($14M)	($11M)	($18M)	($741K)	($869K)	($5M)	($17M)	($20M)	($7M)	Operating working capitalOper. WC
$371M	$439M	$680M	$921M	$1.9B	$1.3B	$1.5B	$1.6B	$1.3B	$2.0B	$2.1B	Current assetsCur. assets
$84M	$102M	$112M	$189M	$455M	$616M	$632M	$711M	$665M	$1.4B	$1.3B	Current liabilitiesCur. liab.
4.4×	4.3×	6.1×	4.9×	4.2×	2.2×	2.4×	2.2×	2.0×	1.4×	1.7×	Current ratioCurr. ratio
$36M	$39M	$37M	$139M	$141M	$1.4B	$138M	$138M	$137M	$38M	$38M	GoodwillGoodwill
$581M	$606M	$902M	$1.5B	$2.4B	$3.8B	$2.6B	$2.7B	$2.4B	$2.8B	$2.7B	Total assetsAssets
—	$0	$276M	$785M	$1.1B	$2.3B	$2.3B	$2.3B	$2.3B	$3.0B	$3.0B	Total debtDebt
—	($315M)	($90M)	$342M	($182M)	$1.5B	$1.4B	$1.4B	$1.5B	$1.6B	$1.8B	Net debt / (cash)Net debt
2.4×	1.1×	3.4×	3.6×	10.1×	47.1×	-46.5×	19.9×	27.5×	14.4×	21.1×	Interest coverageInt. cov.
$345M	$397M	$401M	$407M	$742M	$629M	($547M)	($544M)	($759M)	($1.1B)	($1.1B)	Shareholders’ equityEquity
—	6.0%	6.3%	5.4%	3.8%	6.0%	9.0%	10.4%	10.1%	8.5%	8.3%	Stock comp / revenueSBC/rev
—	—	—	—	—	—	$1.0B	—	—	$102M	$3K	Goodwill written downGW imp.
											Per share
114M	122M	127M	126M	136M	147M	127M	140M	132M	124M	121M	Shares out (diluted)Shares
$3.21	$3.61	$4.75	$6.51	$12.65	$15.88	$20.24	$19.61	$21.32	$23.23	$23.98	Revenue / shareRev/sh
$-0.26	$0.67	$0.61	$0.76	$2.56	$3.36	$-5.48	$2.19	$2.30	$1.31	$2.35	EPS (diluted)EPS
$0.22	$0.53	$1.56	$1.59	$4.97	$4.37	$5.31	$4.94	$5.60	$5.46	$5.88	Owner earnings / shareOE/sh
$0.11	$0.53	$1.56	$1.59	$4.97	$4.37	$5.31	$4.94	$5.60	$5.46	$5.88	Free cash flow / shareFCF/sh
$0.32	$0.03	$0.01	$0.06	$0.01	$0.08	$0.08	$0.09	$0.11	$0.12	$0.11	Cap. spending / shareCapex/sh
$3.04	$3.25	$3.15	$3.23	$5.44	$4.29	$-4.32	$-3.88	$-5.76	$-8.85	$-9.39	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+24.6%/yr	+12.9%/yr
Owner earnings / share	+42.6%/yr	+1.9%/yr
EPS	—	−12.5%/yr
Capital spending / share	−9.9%/yr	+63.6%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Marketplace revenue-0.7%
“Marketplace revenue decreased primarily due to a $47.1 million decrease related to the sale of the Reverb marketplace on June 2, 2025 and a decrease of $16.8 million in transaction fee revenue, which was driven by a decline in Etsy marketplace GMS partially offset by an increase in Depop GMS.”
✓ direction matches the filed record
Services revenue+11.3%
“Services revenue increased primarily due to a $62.2 million increase in advertising revenue, largely driven by an increase in average price per click on Etsy Ads.”
✓ direction matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

124Mpeak FY2021

ROIC

36%low FY2022

Gross margin

72%low FY2017

Net debt ÷ owner earnings

2.3×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$678Mowner earningsvs.$163Mnet incomelow FY2016

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned $163M of profit into $678M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$163M

Owner earnings$678M · 24% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$163M	$303M	$308M	($694M)	$494M
Depreciation & amortizationnon-cash charge added back	+$102M	+$108M	+$91M	+$97M	+$74M
Stock-based compensationreal costnon-cash, but a real cost	+$245M	+$283M	+$285M	+$231M	+$140M
Working capital & othertiming of cash in and out, other non-cash items	+$184M	+$58M	+$22M	+$1.1B	−$56M
Cash from operations	$693M	$752M	$706M	$684M	$652M
Capital expenditurecash put back in to keep running and to grow	−$15M	−$14M	−$13M	−$10M	−$11M
Owner earnings	$678M	$738M	$693M	$673M	$640M
Owner-earnings marginowner earnings ÷ revenue	24%	26%	25%	26%	27%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $245M), owner earnings is nearer $433M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 14.4×

Comfortable

Operating income $266M ÷ interest expense $19M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $1.6B · 6.0× operating profit

Heavy net debt

Cash $1.4B − debt $3.0B

What this means
Netting $1.4B of cash and short-term investments against $3.0B of debt leaves $1.6B owed, about 6.0× a year's operating profit (11.2× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -12d

Negative, funded by others

DSO 1 + DIO 0 − DPO 13 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital 24%

High through the cycle

9-yr median, range -64%–72%; 36% latest = NOPAT $176M ÷ invested capital $488M

Industry peers: median 14%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 36% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 25%

High through the cycle

10-yr median margin, range 7%–39%; latest $678M = operating cash $693M − maintenance capex $15M

Industry peers: median 18%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 24% of revenue this year, a 25% median across 10 years. Treating stock comp as the real expense it is (less $245M of SBC) leaves $433M.
Are earnings backed by cash? 4.25×

Cash-backed

Cash from ops $693M ÷ net income $163M

In the filing’s words The filing leans on adjusted, non-GAAP earnings, but the GAAP profit is itself cash-backed — the adjustments are not papering over a cash shortfall here.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 115%

Returned more than it generated

Dividends + buybacks $777M ÷ Owner Earnings $678M

What this means
The company returned more than it generated: against $678M of Owner Earnings, $777M (115%) went back to shareholders, $0 dividends, $777M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $245M stock comp, the real buyback was about $532M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.15×

Harvesting

Capex $15M ÷ depreciation $102M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $2.9B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.44×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $3.0B vs $597M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 2 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +498%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $2.72/share (latest year $1.72), the averaged base the calculator's gate runs on, and book value is $-11.57/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 8 of 10

What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 6 of 9 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 7% → 11% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 7% early to 11% lately, median 10% — pricing power intact or improving.
Reinvestment, incremental ROIC —

What this means
The reinvested base moved too little against the change in profit to read a reliable return on it here — the figure would be a small-denominator artifact, not a moat. Judge this one on the owner-earnings record and the cash it returns instead.
Owner earnings growth +36%/yr

What this means
Owner earnings grew about 36% a year over the record.
Worst year 2022 · −25.7% op. margin

What this means
Operations went underwater in 2022, understand why before trusting the good years.
Share count +1.0%/yr

What this means
Roughly flat share count, little dilution, little buyback.
How management talks about it Owner’s terms

What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“The use of AI, a relatively new and emerging technology in the early stages of commercial use, exposes us to additional risks, such as damage to our reputation, competitive position, and business, legal, and regulatory risks and additional costs.”

The moat the record shows, a high return on capital held across years, was earned before AI collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$2.1B

Cash & short-term investments$1.2B
Receivables$9M
Other current assets$890M

Current liabilities$1.3B

Accounts payable$15M
Other current liabilities$1.2B

Current ratio1.69×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.69×stricter: inventory excluded

Cash ratio0.97×strictest: cash alone against what's due

Working capital$862Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+3.1%the freshest read on whether the business is still growing

Current ratio, recent quarters2.4× → 1.7×

Deeper floors

Tangible book value($1.2B)equity stripped of goodwill & intangibles

Net current asset value($1.7B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$2.4B$39M of it operating leases

Deferred revenue$30Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $4.7B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$114M · 2%
Buybacks$3.4B · 72%
Retained (debt / cash)$1.2B · 25%

Returned to owners$3.4B
74% of the owner earnings the business produced over the span, $0 as dividends and $3.4B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span cash and short-term investments rose $1.0B.
Average price paid for buybacks$74.21
Across the years where the filing reports a share count, 46M shares were bought for $3.4B, about $74.21 each. Year to year the price paid ranged from $17.57 (2017) to $545.82 (2021); its heaviest year, 2025, paid $53.98 ($777M).
Net change in share count6.6%
The diluted count rose from 114M to 121M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$335M12% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity—goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$2.0Bover 10 years buying other businesses, against $114M of capital spent building

$1.1B written down across 2 years (2022, 2025): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 58% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Silverman	$40.6M	$52.4M	$640M
2022	Silverman	$16.5M	−$15.8M	$673M
2023	Silverman	$16.6M	$5.9M	$693M
2024	Silverman	$18.0M	$3.7M	$738M
2025	Silverman	$18.1M	$19.6M	$678M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership5%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$245M
The slice of the business handed to employees in shares this year, 8% of revenue, equal to 92% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Etsy Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 5 tests turned up something to look into; the other 3 came back clean.

Look hereDid the share count rise anyway?6.6%
Diluted shares grew 6.6% over 2016–2025, even as the company spent $3.4B on buybacks. The repurchases were a treadmill: stock issued to staff outran them, so owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereAre "one-time" charges a yearly habit?5 of 10 years
Management took an impairment or write-down in 5 of the last 10 years, $2.4B in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Commercial Services & Supplies

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
CPAYCorpay Inc.	$4.5B	98%	43.9%	11%	37%
FOURShift4 Payments	$4.2B	23%	1.9%	-1%	9%
CARTMaplebear Inc.	$3.7B	74%	2.4%	21%	18%
MSCIMSCI Inc.	$3.1B	80%	52.3%	38%	46%
ETSYEtsy Inc.	$2.9B	70%	10.5%	24%	26%
ZZillow Group Inc. Class C Capital Stock	$2.6B	78%	-8.9%	-3%	10%
EXLSExlService	$2.1B	86%	12.5%	14%	12%
FICOFair Isaac	$2.0B	73%	30.6%	35%	29%
Group median	—	76%	11.5%	18%	22%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Etsy Inc. has delivered.

Today’s price $

Through the cycle, Etsy Inc. earns about $742M on its 25.7% median owner-earnings margin. This year’s 23.5% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($742M) Net of stock comp (−$242M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+2%/yr

Owner-earnings growth · ’16→’25+38%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $711M on 95M shares outstanding, per the 10-Q cover, as of 2026-04-24; net debt $1.8B. The if-converted diluted count is 121M, 28% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh ETSY against another business →

Cite: Owner Scorecard, "Etsy Inc. (ETSY), the owner's record," https://ownerscorecard.com/c/ETSY, data as of 2026-07-09.

Manual order: ← ETR its page in the Manual EU →

Industry order: ← EEX the Commercial Services & Supplies chapter EXLS →