Etsy at Goldman Sachs Conference: Embracing AI for Growth

On Tuesday, 09 September 2025, Etsy Inc (NASDAQ:ETSY) presented at the Goldman Sachs Communicopia + Technology Conference 2025, revealing its strategic focus on leveraging technological advancements, such as generative AI, to enhance user experience and drive growth. While Etsy aims to transform from a last-resort shopping destination to a starting point for consumers, challenges remain in maintaining strong financial margins amid evolving market dynamics.

Key Takeaways

• Etsy is focusing on technological advancements, particularly AI, to improve user experience and drive growth.
• The company reported strong financial performance with nearly 30% EBITDA margins and $635 million in free cash flow over the last 12 months.
• Etsy is shifting marketing strategies towards platforms like TikTok and YouTube to reach new consumers.
• Depop, a subsidiary, is experiencing rapid growth, with U.S. GMS increasing over 50% year-over-year.
• Management remains optimistic about Etsy’s resilience and future opportunities.

Financial Results

Etsy reported significant growth in Gross Merchandise Sales (GMS), increasing from less than $5 billion in 2019 to $11 billion in 2023. The core Etsy business maintained strong EBITDA margins, approaching 30% in the third quarter. The company generated $635 million in free cash flow over the past year, demonstrating robust financial health.

Despite flat or declining GMS post-COVID, Etsy has maintained margin discipline. The company holds $1.3 billion in cash and is actively engaged in a stock buyback program, prioritizing investments in Etsy and Depop.

Operational Updates

Approximately 45% of Etsy’s GMS in the last quarter came through its app, showing year-over-year growth. The company is enhancing its app to facilitate discovery and engagement, drawing on lessons from Depop’s turnaround.

Marketing efforts are evolving, with a shift from linear cable to digital platforms like TikTok and YouTube. Personalized marketing in owned channels, such as push notifications and emails, is contributing significantly to GMS.

Future Outlook

Etsy is committed to being present where consumers discover items, improving its ability to match buyers with unexpected finds. The company is investing in AI to understand buyer preferences and create personalized shopping experiences.

In anticipation of changes in global trade policies, Etsy is collaborating with postal carriers to ensure smooth trade flows, preparing for the removal of de minimis exemptions.

Q&A Highlights

During the Q&A session, management discussed leveraging synergies from Depop’s app-centric approach to drive growth on Etsy. They emphasized the importance of investing in machine learning, AI, and new marketing channels while maintaining a balanced capital structure.

For more details, readers are encouraged to refer to the full transcript below.

Full transcript - Goldman Sachs Communicopia + Technology Conference 2025:

Unidentified speaker: In the interest of time, and while we let one or two people get settled, we’re going to get started with our next round. It’s my pleasure to have the team from Etsy here, and it’s the whole team. We’ve got Josh Silverman, CEO, and Lanny Baker, CFO. Great to talk to both of you. Thanks so much for being part of the conference.

Josh Silverman, CEO, Etsy: Great to be here. Thanks for having us.

Unidentified speaker: Okay. Josh, I want to go backwards before we go forwards. You’ve been on a journey in the company over the last couple of years where you were dealing with some headwinds in the business, but now you’ve got a number of strategic priorities that you’re executing on to reposition the business. Talk a little bit about the journey you’ve been on over the last 12 or 18 months before we set the stage for where you think the company is going over the medium to long term.

Josh Silverman, CEO, Etsy: Heading into COVID, I think we’d done a ton to make Etsy great. If you knew what you wanted, Etsy for sure had it. It turns out that during COVID, a lot of people knew exactly what they wanted, couldn’t find it anywhere else, and turned to Etsy. Our business more than doubled over that time. What I’m proud of is we’ve been able to largely hold those gains, even when people came out of COVID and had infinite choices. We had about $5 billion, a little less than $5 billion of GMS in 2019. We did $11 billion of GMS last year. We had 45 million customers in 2019 coming into COVID. We had 88 million active users, active buyers, people who’d shopped in the last 12 months with us, last year. We’ve been able to hold those customers.

The opportunity is how do we grow beyond the gains that we had during COVID? I think the opportunity that we saw ahead of us was to not just be the place to go if you’ve looked everywhere else and can’t find it. For sure, we have what you need at Etsy. How do we move up the journey to be a starting point when you’re just beginning to plan your wedding, when you’re just thinking about gifts you want for friends, when you’re just redecorating your house? Etsy has so much to offer.

Until last year, we needed to do some foundational work to do things like free up a lot of screen real estate to allow for more discovery, build some infrastructure to allow us to do more with recommendations, and importantly, elevate quality, understand what are the best items on Etsy, and really elevate the very best amongst the 120 million items on Etsy, and drive people to use the app. I’m sure we’ll talk a lot more about it, but I feel really great about how the investments we made last year and some of the foundations are starting to pay off this year.

Unidentified speaker: Okay. I’m going to interrupt the flow because as a former lawyer, I’m embarrassed that I forgot to read Safe Harbor and say relevant Safe Harbor language can be found on Etsy’s website. I am literally embarrassed as a former attorney. I’ll have to get rid of that law degree that sits in my office. Thank God we started by talking backwards before we talked forwards. Josh, let’s all go off of that and move on and say strategic initiatives. There’s a number of things you’ve articulated around meeting the consumer where they are, amplifying the consumer experience. Why don’t you go a little bit deeper into what those elements are of where you’re trying to take the business and update folks on where you sit on sort of executing against those today?

Josh Silverman, CEO, Etsy: Yeah. We’ve said there’s four things that we’re really prioritizing at the moment. One is being where consumers are when they’re discovering. Second is being much better at matching people, not just to what they know they want, but things that they didn’t even realize that they want. Third is really leaning into our best buyers and best sellers to elevate the experience there. Fourth is elevating the humanity of Etsy, what really sets Etsy apart. We’re making great progress across all four. On the first one, which is meeting buyers when they’re discovering items, when they’re just starting their discovery journey, shopping behaviors have changed really dramatically in the last five years. Etsy is really changing its marketing spend in a very big way to be where customers are buying. For example, linear cable was about a third of our brand marketing spend last year.

It’s going to be almost none of our marketing spend in the fourth quarter of this year, low single digits. Instead, we’re ramping our investments significantly in places like TikTok and YouTube to really plant a seed in people’s mind early on that you should be thinking about Etsy as a place to discover. When you come to Etsy, we’ve really evolved the Etsy app. The Etsy app today is very different than what the Etsy app was even 12 months ago. If you look at the home screen, about half of the home screen on the Etsy app is just a continuous feed of discovery of cool, interesting things you didn’t even know you wanted. We’ve launched a shop tab in the app as well, which is a very browse-based discovery experience.

We’re really leaning into meeting customers where they are early in the journey, being a starting point for your shopping mission, not just a place to come when you’ve already figured out what you want. Second is matching. We have an opportunity to do far better, not just at meeting the need you had, as we said, but also of making non-obvious connections. This is an area where generative AI is helping so much for us to understand what the best item on Etsy is to meet your needs based on your personal taste and preference, but also to make non-obvious connections and really surprise and delight you with all the cool stuff we have on Etsy. In doing so, we build a flywheel where we know you better and better every interaction.

Every time you come to Etsy, Etsy feels more and more like a curated shop made just for you, which leads to our third pillar around leaning into our best buyers and our most active sellers. Like most e-commerce sites, there’s a smaller % of Etsy buyers that account for a larger % of our sales. We have an opportunity to take, for those buyers, we know a lot more about their tastes, we know a lot more about their preferences, and there’s an opportunity to really make Etsy feel more curated and customized for them. There are a lot of advances in generative AI we’re really investing in right now that I think are really going to deliver in a big way on that. We’re seeing early green sheets of that. We’re also launching a new version of our loyalty program.

We launched a beta version one of our loyalty program, which I think did a great job of leading with a free shipping benefit that’s been popular and driven more engagement. We’ve been working through the economic model to make it scale. V2, which we’ll launch in time for the holidays, is going to be more targeted towards our best customers and getting even more incremental shopping from our best customers, rewarding them for every purchase, and doing that in a way that I think is going to be able to scale more from an economic architecture. Fourth, but certainly not least, leaning into what makes Etsy even more human. For example, really driving more conversations directly between buyers and sellers, elevating the making process itself so buyers can really see the process the seller made to make the item. Tons of opportunity.

I would say this is an incredibly exciting moment for Etsy, and I’m sure we’ll spend a lot more time talking about it, why Etsy and why now. The advances that are happening in generative AI are uniquely helpful to help Etsy in so many of these moments. We’ll dive deeper into it. While everyone’s talking about the productivity gains they expect to get from generative AI, and we expect those too, making our engineers more productive, making customer service more efficient, generative AI is especially good at adding context where you lack context. If you think about Etsy with 120 million items that don’t map to a catalog, we have virtually everything for sale, but it’s highly unstructured, serving the needs of almost every buyer. The opportunity to add context and to add structure to that is incredibly powerful in driving our top-line growth, not just bottom-line efficiency.

Unidentified speaker: Okay. I want to take a couple of pieces of that and build on it. First, let’s start with the application, the Etsy app that reached the highest ever share of GMS, roughly 45% in the last quarter. You’re seeing great growth. Talk a little bit about the app as the centerpiece for your strategy and how you think the work you’ve done on the app positions you competitively.

Josh Silverman, CEO, Etsy: Yeah. As you said, now about 45% of GMS in the last quarter came through the app. Actually, Etsy GMS on the app was growing year over year. We’re seeing early green shoots there. We’re very pleased by the growth we’re seeing in monthly active users and in downloads. We’ve been investing a lot more in driving people to use the app. We know that when people download the app, their lifetime value goes up by about 40%. Making the Etsy app the centerpiece of the Etsy experience is a very big priority for us. The other thing that we love about the app is having Etsy in your pocket on an app.

It’s uniquely well-designed to actually be a source of entertainment and discovery in moments when maybe you’re waiting for the subway or there’s a commercial break on TV. There are very few brands out there that have enough appeal, resonance, uniqueness that you would actually turn to them as a source of entertainment and not just as a functional need. Etsy is one of those brands. People expect that of Etsy, and we have a huge opportunity to deliver. If you look at our app today, it is dramatically different than what our app was like a year ago. It’s designed not just to help you get to what you already came knowing you wanted to buy, but we’re dedicating a lot of screen real estate now to showing you things you didn’t even realize you wanted. There are two things that are happening from that.

One, we’re learning more about you. As we show you a continuous scroll of really cool items, what do you dwell on? What photos do you enlarge? That’s teaching us a lot about you and your tastes and interests. It’s also helping you to see all of the different use cases that Etsy can meet. We have some evidence of the future today in terms of the power that this can unlock for Etsy. If we look at the Depop growth story, in 2022, Depop was growing at a very tepid rate. Kruti Patel Goyal and Rafe Colberg went over to Depop, and they led a dramatic turnaround of Depop. Now we’re seeing Depop grow at really terrific rates, especially in the U.S.

What’s happened is almost all of that growth is being driven by better recommendations, getting a customer to not just make the purchase they came for, but show them extra things and get extra engagement, extra purchases. It turns out that engagement has all been additive to the growth that they were already getting, and it’s led a real inflection point. Taking that learning, an app-centric discovery-based experience, and bringing that back into Etsy with Kruti now as our President and Chief Growth Officer, and Rafe as the Chief Technology and Product Officer of Etsy, taking that learning and driving that through the Etsy experience, I’m incredibly optimistic about what that can mean for us.

Unidentified speaker: Okay. Great stuff. I want to turn back to AI and machine learning. You referenced it a little bit earlier. You kind of talked about it from an internal process perspective, and I think it left us that that’s sort of somewhat understood. Talk a little bit about how AI continues to inform product development, change the external-facing elements of Etsy, and how that might differentiate Etsy in the years ahead.

Josh Silverman, CEO, Etsy: It’s so powerful for us in so many ways. Yes, it’s going to help our engineers code things more efficiently and help our customer support agents. Much more than that, Etsy faces some really unique opportunities and computer science challenges. One of the questions we ask ourselves all the time is how artisanal is this item actually, which has been a question that’s been basically impossible to answer with traditional search engines. You can show an item to AI, and it will say, "Oh, that piece of carpentry is particularly difficult to make because of the way the wood is joined. You have to be a true artisan to make that end table." That’s going to receive a 9 out of 10, where some other item that looks awfully mass-produced might receive a 1 out of 10.

The opportunity to use AI to elevate the best of Etsy in a way that, frankly, no one else even cares about, questions others aren’t even asking. Let me give you a few other examples. The way our search engine works, when you search for something on Etsy, we typically have 10,000 or more relevant items. What our search engine is trying to do is figure out what’s the thing you’re most likely to buy and put that first. Historically, the way it’s done that is look at, "Well, what have I shown customers before and which items have had a high conversion rate?" That leads to a memorization bias where the items that get shown the most and get bought the most end up on top. That’s fine if you’re Amazon or Walmart.

Actually, for Etsy, what we’re trying to do is not show the thing that’s been bought 1,000 times. We’re trying to show the thing that’s maybe one of a kind. It’s never been bought before. It’s made just for you. How do we do that without showing every person, every item 1,000 times? The opportunity to show an item to an AI and say, "Does this item look like it would be very appealing to someone? In fact, does this item look like it would be appealing to someone who is from the Midwest and has a boho sensibility, as opposed to someone who’s from Los Angeles and has a grunge sensibility?" AI can suddenly answer these questions for us in a much more compelling way than we’ve ever had possible without, by the way, needing to show every item to every buyer.

One of the challenges on Etsy is the way to learn if an item is cool is to show it to people. I’d rather not use our buyers as a test bed where we’re showing them both the best and not best of Etsy. The other opportunity that AI brings us is not just to understand our items. What I’ve been talking about is how do we understand our items better? Is this item compelling? Is it priced in a compelling way? How do we also understand our buyers in a really rich way? The way that historical recommendation algorithms have worked are very listing-centric. What listings have you bought before and what other listings are related to that? That ends up being highly relevant and highly boring. You know, you bought these eyeglasses. I’m going to show you eyeglass cases, right?

What we’re now able to do is map every customer as a unique point in a universe based on hundreds of different tastes and preferences, and map every item in that same universe based on tastes and preferences. We can then see for this customer who sits at this point in the universe, what items are around that customer and surprise and delight you with connections you never would have expected. We have our first recommendation models coming now live to site through these buyer affinity models, and we’re seeing very promising early results that this can lead to much more engagement and a lot more items matching you in surprising and delighting ways. Part of where that’s going to really help is also helping to cross-sell customers to different categories, to different occasions, so we get even more frequency.

I think over time, what that can do to our cohort curves, what that does to lifetime value is really compelling.

Unidentified speaker: Maybe just sticking with this theme, I don’t want to bring any into the conversation on browsability and sort of discovery. Just go a little bit deeper on what that can do in terms of changing buyer engagement, and how might that create different or more inspirational shopping experiences because of that engagement over the medium to long term.

Josh Silverman, CEO, Etsy: Yeah. I mean, today you’re limited by the creativity you have to enter keywords into our search engine. There are people who really speak Etsy. They speak merch, and they know words like boho, right? They get a lot of, if you sit next to our best shoppers, their ability to use our search engine, wow, they are powerful. You know maybe Target wants to hire them to be a merchandiser, right? They have passion for that. For most people, you know a very common keyword on Etsy would be like gift for mom cat. You know there’s only so much we can do with that. It turns out we’ve got hundreds of thousands of gifts for moms who own a cat. If we could get a little more, wouldn’t that be compelling? If you could tell us a paragraph about your mom, how exciting would that be?

The opportunity to create browse-based paths where people don’t need to have their own imagination about what keywords to enter, but we can show them interesting things, and then they can riff off of that. We’ll show you something, and you’ll say, "Yeah, I like that, but actually more in this direction." That can be very exciting, and it’s a lot less cognitive load for customers, and it leads to a lot more interesting, surprising, and delightful customer experiences. The ability to do that in a really good way five years ago was much harder, dramatically better today with the latest technology, and I think it opens more doors for Etsy than almost anyone else.

Unidentified speaker: Okay. Thank you, Josh. Lanny, I want to bring you in. Josh referenced earlier the evolution you guys have been on as a company with respect to how you spend on marketing. Maybe talk a little bit about how those marketing investments have arced and changed, and how you think it might change sort of driving customer relationships over time as well.

Lanny Baker, CFO, Etsy: Sure. I think it’s dovetailed perfectly. I want to start out by saying your question is about the evolution in our marketing, and there’s a lot that’s evolving. One thing that’s really not evolving about this company is that we don’t set a marketing budget. We set a marketing return requirement. We look at what the marginal dollar spent is for the marginal item sold or the marginal increase in customer LTV, and we want to spend right up to that point. When we find opportunities in the marketplace to spend more, we spend more. Our spending is really, I think, will continue to be governed by the return that we get on the spending. That leaves a couple of opportunities. There are things that we can do with looking at new marketing channels.

Search is a great area for us right now, or sorry, social media, which is an area we’ve probably underinvested in historically, but we’ve made some changes to the product landing experiences that are now allowing dollars that we put into that social channel to yield better results, allowing us therefore to put more money into those channels and sort of get that flywheel spinning of the more we spend, the more we learn, the more we can optimize, the more we can spend. We’re doing that against social. Josh talked about TikTok. He talked about YouTube and other places where we’re shifting dollars into these new channels, all in an effort to show up where customers are today. It’s not just search, and it’s in these other channels.

The second part of it is that as we improve the performance of our product and our conversion, as we know more about the individuals, as we personalize the experience, as Josh described, the LTVs of those customers that we acquire can increase, and we’re seeing progress there as well. Our marketing spending is shifting channels to the places where people are, and then we’re following that up with highly personalized and really relevant experiences. One of the things I’m most excited about within our marketing mix as it evolves right now is the owned channels that Etsy has to very personally, directly communicate with our buyers and our people on the service are a huge opportunity for us, enabled by AI that’s allowing us to learn more about our customers faster.

The percentage of GMS that’s coming through our push notifications and our outbound emails, where we’re not paying a third party for that, as we personalize those messages, the percentage of GMS that’s coming from those channels is rising really quickly, and it’s at a place where, frankly, it’s close to eclipsing some of our biggest paid channels. When you zoom all the way out, I think you get this picture of we’re going to continue to spend right up to that marginal return while trying to find channels that can unlock incremental audience and then product experiences that can unlock incremental LTV of the customers that we acquire.

Unidentified speaker: Okay. Understood. The environment out there remains fluid. There’s tariff implementation dynamics around the commerce landscape. There’s the de minimis exemption dynamic that continues to shift. Can you level set on Etsy’s cross-border business today and how some elements of seller diversification might insulate you from some of the dynamics that are the shifting winds out there broadly in the landscape?

Lanny Baker, CFO, Etsy: Sure. You know the de minimis exemption, I think most people are pretty familiar with that. That just expired 10 days ago or even less. We have a relatively small amount of data. I’ll come back to talk about that. Let me zoom out for a second and say there have been instances in the past where global trade has been upended or disrupted. COVID would be one, the supply chain interruptions that we saw on the back end of that. Through those, we have seen the Etsy marketplace be remarkably resilient. We have a huge array of inventory from sellers all over the world. In most products and most categories, there are alternative options. There is deep exchangeability and replacement capability from the breadth of the sellers that we have on our site.

What we see, if one lane or one type of trade gets a little bit hamstrung for the moment, there are other parts of the Etsy marketplace that sort of fill in very naturally. We’ve seen that in the past. Today what we’re seeing is the implementation of tariffs, and it’s changing prices. It’s probably changing, given that like 20% of our GMS or a little bit more than that is U.S. buyers buying things from overseas. Tiny little percentage, 1% or so is from China. Most of it’s from other parts of the world outside of China. Even at 20%, that’s a relatively small number. There are many others in the e-commerce world where the percentage of overseas purchase activity is much greater than that. Prices are going up for goods that are coming through those channels.

I think Etsy is in a pretty good position in that we’ve got 60 million plus items that can be sourced within the United States. We have a great amount of replaceability in there. What we’re seeing right now, just in the last couple of weeks, is that there is some shifting of listing prices reflecting what’s going on with tariffs. There is some shifting in where you know imports versus domestic purchases. What we’re seeing overall is this resiliency of the marketplace.

Josh Silverman, CEO, Etsy: If I can just jump in on that too, I’m really proud of the Etsy team for how prepared we were for this moment. We’ve been working very closely and collaboratively with the Trump administration to make sure that when de minimis is removed, we have a solution that allows small parcels to flow very quickly and without adding cost other than the tariff. The Trump administration was very open to constructive ideas on how to do that. Etsy architected a solution, which they adopted pretty much whole cloth. We’ve been able to bring that to postal carriers around the world to have solutions in place for many of our trade lanes. We’ve also been communicating very actively with our sellers to make sure that they’re well prepared for this as well.

Unidentified speaker: Okay. Super clear. Lanny, just one last one before turning back to Josh. Take rates were a nice tailwind in Q2. You had the ads performance in the Etsy business. You’ve maintained healthy margins. Talk a little bit about the balance of margins and the trajectory and profitability metrics if you were to face more favorable trends in the business than some of the GMS growth that’s played out over the last 12 months.

Lanny Baker, CFO, Etsy: Sure. You know, look, I think marketplace businesses, I love them. When you find the right marketplace and you find that it’s a big market where there’s a lot of value that can be added by bringing supply and demand together, it’s kind of naturally a very attractive economic opportunity with potentially great take rates and very strong profitability. One of the things that’s remarkable about Etsy over the last few years is while we’ve been in an environment post-COVID of pretty flat GMS, declining GMS, we’ve really done, I think, an outstanding job of maintaining margin discipline and preserving and maintaining Etsy’s overall margins. The core Etsy business is in the very high 20% EBITDA margin levels.

In this, we said at last quarter, we said we’ll tick up a little bit in the third quarter from where they were even in the second quarter, very, very close to 30% EBITDA margins on the core Etsy business. We think we can maintain that. We’re making really important investments to make sure we’re ready for the transitions that’s going on with AI. We think we can keep those kind of levels at Etsy. We also have the Depop opportunity, which we’ll probably talk about in a moment. We love this whole idea of re-commerce and used clothing sales. We think it’s a really attractive growth market. We’ve got a very attractive position where we are by far the fastest growing company in the United States in that marketplace, growing GMS from U.S. buyers at over 50% year over year.

That’s a much earlier stage of development marketplace and it’s an earlier stage business. It doesn’t yet have those margins that I just described for Etsy. Though over the last couple of years, as we’ve grown the GMS at Depop, we have delivered sort of 20, 30+% of the incremental revenue growth down to the bottom line with Depop. We’re in a mode right now where we’re investing very aggressively at Depop to increase the value of that asset, increase the position that we have in that marketplace. That’s a little bit of an offset while the Etsy margins will stay in the high 30%. As we’re putting all those pieces together, at the end of the day, we’re looking at the cash that we are generating. We’ll generate over $625 million. In the last 12 months, we generated $635 million of free cash flow.

It’s a trade-off between growth and margin. We’re very focused on driving faster growth in the core Etsy business and accelerating where we are in Depop. We’ll continue to manage the margins like we have in the last couple of years.

Unidentified speaker: Okay. Understood. We only have a few minutes left. I’m going to ask one of each of you. Josh, you first. Depop, as Lanny said, has shown very good growth. You are making some marketing investments in that in Q3. Talk a little bit about investing behind Depop and what some of the key learnings from Depop might be for the broader array across Etsy.

Josh Silverman, CEO, Etsy: Yeah, great. I’d say when we bought Depop and Reverb, a lot of the thesis was we think there’s going to be a big opportunity for shared learnings between them. We have the opportunity with Depop to really lead a turnaround there. Kruti and Rafe, in particular, led a real turnaround there with a very talented team at Depop around an app-centric, discovery-centric experience. I think the learnings from that are incredibly relevant to Etsy. If we see anything like the kind of impact at Etsy we saw at Depop, that will be an incredible money well spent to have done that acquisition. That alone, the learnings we can bring. Depop’s got a tiger by the tail. When Kruti and Rafe arrived, it was really tepid growth. That business has grown 30% year over year, each of the last several years since they’ve been there.

In the U.S., greater than 50% year over year sustained. It was around a $550 million business of GMV a couple of years ago. It’s over a $1 billion run rate now and growing really well. Most of that is due to getting much better at recommendation and discovery algorithms in an app-centric way. I think we have a similar opportunity at Etsy to become more app-centric, get better at recommendations and discovery, and unlock a whole next wave of growth.

Unidentified speaker: Okay. Lanny, bring us home with a two-sided question. Frame up for investors, what are the key investment priorities to accomplish what you’re trying to accomplish on the growth side? How are those investment priorities balanced with a capital allocation program that strikes the right balance between where you guys as a team allocate capital into the business or to reward shareholders?

Lanny Baker, CFO, Etsy: Sure. We spent a lot of time thinking about the customer problems that Etsy should be solving. We looked really carefully at our buyers, at our sellers, at our inventory, and at changes that are taking place in the technology landscape. We see an enormous amount of opportunity. We’re at the dawn of this era of AI’s influence on e-commerce. I think Etsy’s got a front row seat for that. Our capital that we’re allocating is to make sure that we are capturing those opportunities, that we’re well poised for that. We’re allocating capital to our machine learning and our AI resources. We’re allocating capital to new and emerging channels. We’re allocating capital to partnerships that keep us at the forefront of AI. The core Etsy business remains just, it feels to us like there is so much more we can do with that business. I mentioned Depop.

That’ll also take some of our operating expenses as we lean a little bit more into marketing there. From a capital structure perspective, we’ve got $1.3 billion in cash. We’ve got a portfolio of convertible debt that I think is the right amount of debt given the relatively high EBITDA margins that we have in the business and our ability to surface that. We’ve been very fortunate to get very attractive rates on the debt that we currently have. We recently refinanced a portion of our debt at, I think, a really great rate. We feel really strong about that, feel good about that capital structure in place. That leaves us with $625 million, $35 million of free cash flow in the last year to consider putting on the balance sheet or buying back stock. Our stock is really volatile.

That creates opportunities, we believe, to be buying back the stock pretty aggressively. We’ve bought back a lot of stock this year. We will continue to buy back stock. I think what you’d expect from us is that most of the sort of incremental investment is going to go toward Etsy, then to Depop. What’s left, when the stock is in an attractive place that we like, we’ll be buying back stock.

Unidentified speaker: Okay. Josh, we got one or two minutes left here. Just bring us home with what are the two or three key messages you want to leave with investors from this conversation in terms of your top priorities around execution at Etsy?

Josh Silverman, CEO, Etsy: Thank you. When I arrived at Etsy in 2017, I think people thought Etsy was as big as it could be. The conversation was you’ve achieved your full TAM and you can’t compete with all the competition out there. I think we had $2.5 billion of GMV. We said we think we can do $10 billion of GMV someday. People said, "No way, you’re dreaming." We did over $11 billion of GMV last year. I think we’re just getting started. Now the conversation with Etsy is, "Oh, you’ve just achieved your full TAM and you can’t deal with the competition." It feels like you know the future all over again. I sit here and say what we’ve done a great job of is being the last place you go when you can’t find it anywhere else. We have so much permission to be so much more than that.

Talk to anyone in any coffee shop. Just say the word Etsy. I guarantee the person next to you will say, "Etsy. Oh, I love Etsy. I love Etsy." People love Etsy. They have permission. They have belief in Etsy. This next wave of technology unlocks enormous opportunity for us to actually provide structure and context around the incredible amounts of unstructured data we have to actually delight them with what they want, which is show me things I didn’t even ask for. Help me be a starting point for e-commerce, not just an ending point. Ultimately, there is not room for 1,000 e-commerce sites because we can’t remember 1,000 brands. We’d have to rely on search or someone upstream to get to 1,000 brands. There’s a handful of brands that are going to be enormous.

Those brands are people that do something genuinely different that’s important enough for you to actually remember it. Etsy is one of the tiny handful of brands that does that. That is an enormous opportunity, and we are bound and determined to achieve it.

Unidentified speaker: Great. I appreciate you both coming out West to have the conversation in San Francisco, especially since our respective offices are not that far from each other. Thank you for that. Please join me in thanking Etsy for being part of the conference this year.

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