All right, thank you, everyone. Good morning, and appreciate you being here. I am Rick Patel, Senior Research Analyst covering digital commerce, soft lines, and global brands at Raymond James. We are thrilled to have with us Etsy, and we're joined by CEO Josh Silverman. As you all know, Etsy is a digital marketplace that connects buyers and sellers of handmade and unique goods, very differentiated from other marketplaces, and also differentiated because of its high-margin profile. Before we begin, I would like you to refer to the company's website for their Safe Harbor statement. Just getting that out of the way. So, Josh, appreciate you being here. So you announced some pretty big changes to the leadership team just last week. You announced a new role of Chief Growth Officer. You appointed a new CFO to backfill Rachel Glaser, who is riding off into the sunset, much deserved. You announced the departure of your CTO, and you announced the revival of a dedicated CMO role. So, lots going on. Can you share more about the changes and why you think these changes were important to reignite growth? Yeah, I'm super excited about these changes, and we're at an important moment for Etsy where we are doubling down on what makes Etsy different and special, but also really focused on innovation, so we get back to growth with urgency. We all feel that, so first, bringing Kruti back. Kruti has been with Etsy for quite some time. Most recently, she's been the CEO of Depop, where she's done an absolutely phenomenal job doing a real turnaround of Depop. Depop is a two-sided marketplace Etsy bought that is re-commerce for clothing, and she's laid out a new strategy there, really made a lot of changes in the team, really sharpened execution, and now Depop is growing really quickly. It grew 30%, on track to grow 30% year over year this year in the U.S., growing much faster than that, so really impressive to see what she's done. And we're bringing her back to the core marketplace as President and Chief Growth Officer, and she'll have product and marketing and operations. So she'll have all of the touch points with the customer. And the idea is to really drive a customer-obsessed, deeply focused view of our customer experience through all the touch points. And so I'm really excited to have her there. I'm also really excited to have Lanny Baker join us as our new CFO. We ran a thorough search. We met with a lot of people. We had a lot of really good people raise their hands. So we had a choice among many good candidates. And I'm incredibly excited about Lanny. He has spent more than 20 years as CFO of four different publicly traded two-sided marketplaces. So he really understands the dynamics of two-sided marketplaces. Before that, 12 years as a sell-side analyst on Wall Street, highly respected, really understands the Street, and also just a phenomenal leader and a really good human being. I think he's going to be a really great fit, and I think all of this speaks also to the depth of the bench at Etsy, promoting Brad. Raina will be leaving to be the CEO of The Knot Group. I'm super excited for her. She's been incredible with Etsy, done so much for us, and she's ready, and I'm thrilled, but the fact that we have Brad Minor ready to step into the CMO role, I think speaks to we have a really deep bench with a lot of really great talent at Etsy. I think the combination of Kruti coming back and Lanny from the outside, that combination of some fresh outside perspectives and some people who really know us well and can drive change, I think is super helpful. Can you help new investors think about the current state of affairs at Etsy? The company is one of the biggest beneficiaries during COVID, but is still in the process of settling to a new normal. How should investors think about year-to-date trends through the third quarter? How has performance been relative to your expectations, and how does that tie into the health of the consumer? Yeah, so if we start with the pandemic, just through year-end, as we entered this year, to give some sense, Etsy just grew so much more than our competitors and then held those gains, where our competitors grew less and gave it all back. And let me just give some sense of that. Our CAGR coming into this year on GMS was 25% from 2019 to the end of 2023, 25% CAGR. Amazon's was 11%, Wayfair's was 5%, eBay was negative 4%. So just in a completely different zip code than everyone else. And so gained a ton. We had tens of millions of people come to Etsy for the first time during the pandemic because they didn't have any other choice. We were able to keep those people in 2022 and 2023, largely by replacing billions of dollars of commerce we got in a non-ordinary way during the pandemic. In ordinary course, we wouldn't have gotten that. So standing still, if you will, on GMS has meant replacing billions of dollars of sales each year. And in this moment, as we all know, consumers are very stressed. And so what is growing, e-commerce is growing. But if you look at what's growing in e-commerce, what's growing is everyday essentials that are deeply discounted. People are looking for deals on groceries, deals on very basic apparel to send their kids back to school. And so Amazon and Walmart collectively make up approximately 100% of all the growth within e-commerce. There's puts and takes elsewhere, but those two names alone account for approximately 100%. So as the focus of this year was clearly going to be on discounts and promotions all across retail, online, and off, it's all about who can sell a name brand product cheaper. That's just not where Etsy wins. So we've said this year, we're really focused on investing in the foundations of our differentiation, making sure that we really focus on the things that elevate the highest quality things on Etsy, that show the most diversity on Etsy, so that we are better positioned as we move through the cycle. When one thinks about value, there's what are you paying, but there's also what are you getting for it. We're investing a lot in the what are you getting for it. So the human element of Etsy is more powerful than ever. The differentiation of Etsy is more powerful than ever. We think that sets us up as we come through the cycle to grow even faster and be an even bigger company. Can you help us think about what's in the pipeline for the holiday season? There's quite a few initiatives going on across Gift Mode. You have gift cards. You're spotlighting sellers with promotions. How do we think about these various initiatives that are going on, and how do you see the incremental benefit? Yeah, so when we look at our market opportunity, which is very large, helping people understand what are the moments in their week that they should be thinking about Etsy, it's been a big focus of ours. And gifting, we realize, is an occasion that's incredibly relevant for Etsy. Where else would you want to go to buy a gift, the perfect gift for someone that expresses that you know them, you care, it's so unique and personal to them? Etsy is perfect for that. We think there's a $200 billion TAM just in the U.S. in gifting alone, and we have only about 1% of that at Etsy. That's, of course, holiday gifts in the holiday season, but it's also birthday gifts, anniversary gifts, back to school. People gift almost every month of the year. There's something you should be buying. And many people don't have a lot of confidence in terms of what to buy. In fact, 75% of men say they are not confident in buying a gift. And 90% of the female partners of those men say they're not confident receiving a gift from their male partners. So as unconfident as we guys are, we're probably still too confident. So we invested in Gift Mode on Etsy to make it super easy to find the perfect gift. So Gift Mode has tons of ideas. Tell us one or two things about the person you're buying for, and we'll give you some really unique and special ideas for the perfect gift. And then we've invested throughout the entire gifting experience. So what if I'm late to buy the gift? We have something called a Gift Teaser, where we'll send the person the Gift Teaser on the date of the event, even if the gift itself is going to arrive a little bit later. We've invested in gift lists, so you can create a wish list of things you're thinking of buying for someone, gift reminders to remind you of when your wife's birthday or your anniversary is, for example, and then really upleveling the gift card experience on Etsy. So all the way through the gifting experience, we've been making significant product investments this year. And this holiday season is the first chance many people are going to really get to experience that. So we're super excited about it. Great. And as investors think about 2025, what has you most excited in terms of strategic initiatives that are underway that could really sharpen your execution and move the needle for GMS? So I think our execution has been sharp this year. We've chosen to really invest in things that we think are foundational to Etsy's differentiation. And we've done a lot of things I'm incredibly proud of. I think we've done more to uplevel the customer experience this year than in any other year in my tenure, but they've been really foundational. Let me give you some examples. We've said we really want to create a positive ecosystem around quality within Etsy. So since the beginning of Etsy, the number one thing sellers want to know is, how do I rank higher in search? And if you go and research that, the answer is titles and tags. What keywords do you have in your titles and tags, and how can you SEO Etsy? That's a giant waste of time for sellers, and it's not helpful for buyers. You end up with titles that are just a random list of keywords. What I'd like to see is the way to rank higher in search is to make sure you always ship on time. Do you always get five-star reviews? Do you have a return policy? Customers like, do you charge an appropriate price for shipping? So we reworked our search engine this year. So it's not just based on relevance, how relevant is the item, but also how high is the quality score of the item and the seller. And then we've exposed to the seller a dashboard showing her how she's doing on the various quality metrics that matter, which creates a race-to-the-top dynamic, a positive ecosystem. That took a lot of work from some of our most valuable teams. Our search teams this year spent a good part of this year rebuilding our search engine so that we could launch that new algorithm in a way that didn't hurt GMS. And that took a lot of work. Normally, our goal is to be additive. Teams are goaled based on, does this thing create more GMS? This year, creating a new quality score, the start was, can you launch that quality score within search in a way that doesn't hurt GMS? So there's a real opportunity cost taking some of our most valuable teams and having them spend the better part of a year launching that. But that's now launched. We're super excited about it. And I think it sets us up really well for next year. One fun fact, more than 2 million listings have now had shipping repriced to be less than $5.99, which we tell sellers, if shipping is more than $5.99 for domestic package, you're going to be penalized in search because buyers don't like that. So we're now, I think, going to be able to build on top of that in a way that next year is a lot more additive with this positive ecosystem. Another example, more diversity in search. We've really worked on making sure that we have so many items that are relevant but similar. How do we use search to show a broader range of items so that we might find the perfect item for you in this search, and if we don't, at least you leave having a better understanding of all the things we can offer you on Etsy. That was another example of an opportunity cost this year showing more diversity in a way that I think is going to set us up better for next year. One last example, we really want to do more to not just serve the mission you're on when you arrive on Etsy, but to spark new missions, and we have historically shown you on Etsy lots of, when we look at recommendations, things we already know about you. What is the last one or two actions you took on Etsy? We're just going to show you a lot more versions of that because per pixel, that's what converts the best, but what it doesn't do is inspire you to understand all the things we can offer you, to show you things you didn't even know to expect on Etsy. We've spent a fair amount of effort this year collapsing what we call Pick Up the Thread modules, recommendation modules based on your last one or two actions, collapsing those to use less screen real estate, to create more screen real estate to show you recommendations and spark brand new missions. We have about one-third less screen real estate dedicated to pick up the thread as we enter this holiday season. Now we're going to be able to use that screen real estate to really inspire brand new missions. These are just some examples of a lot of the foundational investments we've made this year. As we head into next year, then I think we can build on those in a way that is more additive and driving positive GMS. Let's talk about buyer frequency. I know Etsy has a base of buyers that have historically been very loyal to the platform. Talk to us about what you've seen with buyer frequency year-to-date and the opportunities around that. Yep. So in our 10-K at the end of 2023, we launched cohort. We announced, as we always do, our cohorts. And what we show is that about half of buyers on Etsy bought once a year, and the other half bought more than once a year. For the half that bought more than once a year, they bought five times on average. If you compare that to pre-pandemic, that's real progress. It was 60-40. Before the pandemic, about 60% of people bought only once a year. Now, 50% of people bought once a year. So that's progress, but still a lot of opportunity to do a lot better. When we compare ourselves to other e-commerce sites, we know there's a lot of opportunity there. That's where focusing not just on serving the mission you have, but on sparking brand new missions, we think is a huge opportunity for Etsy. We've really focused during my first seven years on Etsy at getting better and better and better at solving the mission you came with, every pixel on Etsy being optimized to convert. What I realize in hindsight is what that's done is we've gotten better and better at when you arrive at Etsy knowing exactly what you want. We get you there quickly, and we make it easy to buy. We've made enormous progress on that. We've effectively outsourced discovery to other platforms because we do great when you arrive at Etsy knowing exactly, I need a throw pillow of odd dimensions in the following fabric. We knock it out of the park. No one's going to do as well as us. But I'm generally just redecorating my living room and looking for good ideas. That has been something that at Etsy we don't deliver a great experience. And we have every opportunity to do that because there's such an incredible diversity of really gorgeous items on Etsy. And by the way, and I'm sure we'll get to this, but GenAI offers such a huge opportunity for us to do better. So that's a very big focus of ours now, is not just to serve the mission you're on when you're at Etsy, but to spark new missions, particularly higher order missions when you're really thinking, I'm just generally planning a wedding. There's a new baby entering the home. I'm redecorating my living room. I'm buying a gift. So many times when I don't yet know exactly what I need, I just know the mission I'm on. We have a huge opportunity to do better there, and by the way, in doing better there, it not only makes the Etsy customer experience more rewarding, where you're going to want to come back more often, it enables us to market in new channels. The marketing channels we've been very effective on are primarily Google. Because you've gone and you've done a search and you've said exactly what you want, then we can deliver on that, but channels like Instagram, for example, or TikTok, rarely do you browse knowing exactly what you want. It's more just, oh, cool jewelry for sale, let me check that out, or, oh, interesting wedding gear, let me check that out. The opportunity to take someone from a much higher order need state to a landing page on Etsy that's satisfying and help drill down to find the perfect thing, that's going to be great on Etsy. It's also going to help us a lot to market off of Etsy. Can we double-click on AI? Yeah. Etsy's been ahead of the curve in terms of finding ways to leverage data to engage buyers. Talk to us a little bit more about the initiatives underway and how you see that improving execution? Yeah, I think we might have more to gain from these more recent advances in AI than almost anyone else. And that's because the opportunity at Etsy is, there's 120 million listings for sale. For most queries on Etsy, we have over 1,000 highly relevant results. Finding the perfect thing for you among at least 1,000 highly relevant items is a lot of work. Imagine walking into a store and the sales agent said, here's 1,000 things, you figure it out, right? The job of the sales agent is to say, tell me one or two things about you, and I will match you with the perfect thing. And on Etsy, it's overwhelming being the number one piece of feedback we hear from customers. I'd rather that than you don't have anything I want. We have too many things you want. So getting you to the perfect thing is a big opportunity for us. And GenAI is great for helping us to solve that. Help me understand exactly what these items are and the differences between them so that I can figure out what's perfect for me. GenAI is great for that. Clean up the data so that we have a really clear understanding of exactly what this thing is. Unlike traditional e-commerce players, we don't get clean data mapping to SKUs for every single item. Every item on Etsy is a snowflake. It's one of one. And so the opportunity to really understand what this thing is, the attributes of it to help buyers to understand the pros and cons, GenAI can really help. In addition to helping solve the tyranny of choice on Etsy, we also can use GenAI to help spark those new missions. For example, a very common entry point on Etsy would be you go to Google, you search for cake topper, you find Etsy, and you land on Etsy. We serve great cake toppers on Etsy. Etsy's great at that. What GenAI can do is help us to understand the context of what that probably means. What that probably means is someone's planning a wedding, and they're looking for personalized figurines to go on top of the cake representing the two people getting married. That's what that word means. And what's the context of that? Not only are they planning a wedding, but they've already sent the invites. They've already bought the engagement ring. Many things we're good at early in the wedding journey. Too late. If they're buying cake toppers, that means the wedding date is very near. And they're probably thinking about tablescapes, place card holders, and bridesmaids' gifts. These are the kinds of things that GenAI can suddenly help us understand the context in a way that I think is very additive. In addition to all that, these are growth and revenue-driving opportunities. There is, of course, a lot of productivity that we're also already seeing. For example, in customer support, we're able to make customer support a lot more accessible this holiday season than it's been in prior seasons because we do, in fact, have chatbots working right now with customers, and they're doing a pretty good job of answering first-pass queries and making our team even more productive. Earlier you talked about how Etsy can be a platform that inspires people to buy things that they may not have even thought of. How far along are you in that journey to executing that? I think we're relatively early. I mean, during my first seven years, we've really focused on driving conversion rate, driving conversion rate, driving conversion rate on the site, and we've seen tremendous gains from that. I'm not apologizing for any of that. We've seen a lot of growth, but what it's meant is that every pixel is really focused on getting someone to convert, which means they probably arrived already knowing what they wanted, and if, let's say, 5% of people arrive with a really clear idea of what they want and are converting, what about the other 95%? What did they arrive? What did they leave Etsy feeling? Let me give you just one example. It might help. I recently bought a shoehorn on Etsy, and it's really nice. It's got a really long handle. It's custom-made by a carpenter because I'm getting older, and bending down to put on my shoes is kind of a pain. So when I show up on Etsy the next day, what do I see but a bunch of shoehorns? Now, who on Etsy needs another shoehorn when you already bought one, right? Why on earth would we do that? Well, it turns out I needed another shoehorn because my wife saw me putting on my shoes and said, "Oh, that's so cool. Would you get me one?" And I said, "Sure." How often does that happen? Very rarely, but more often than any other random item you can show someone. So if you're trying to optimize for conversion, showing someone versions of the most recent thing they bought is, in fact, the highest converting thing you can do. And for the 1% or 2% of people who want that, a second version of the thing they just bought works great. But what did the other 98% of people leave thinking? "Oh, this site is only a shoe site." Or worse yet, "It's only a shoehorn site." Nothing about that experience would tell you we're great for baby products or for Christmas gifts. And so creating more space within our screen real estate to be showing you just cool, trending, interesting products that you might be interested in that are not exploiting what we already know about you, but exploring brand new things we think is a big opportunity for Etsy. Talk to us about new buyer acquisition. So who is not shopping Etsy right now that should be? And how do you get those people off the sidelines? And how do you do so in a way where you still maintain attractive ROAS? Yeah. So first, Etsy has become mainstream among women in the U.S. and U.K. And I say that in a good way. About one in three women in the U.S. and U.K. have shopped on Etsy in the last 12 months. We are, depending on the month, the second or third most popular e-commerce site in America based on number of active users. If we've got something for one out of every three women in America, we've got something for the other two-thirds, for sure. Only one in 10 men in the United States has shopped on Etsy. So we have a huge opportunity to get more people shopping on Etsy. And that's only the U.S. and the U.K. If you look at the rest of Western Europe, for example, it's a huge opportunity where we're only very lightly penetrated. We've seen a ton of progress in Germany, for example. Great, I think, proof point that we can build domestic two-sided marketplaces across Europe and other rich e-commerce marketplaces. So a lot of opportunity to drive penetration. We don't differentiate really in our systems between brand new buyers and reactivated buyers. We have an opportunity in both, and we're happy to get both people who've never shopped on Etsy before. That's what we call a new buyer. Or to reactivate someone who hasn't shopped on Etsy in the last 12 months. That's what we call a lapsed buyer. There's 100 million lapsed buyers on Etsy. And what's great about them is if you talk to them, they love Etsy. They just haven't thought to shop on Etsy. So reactivating, actually, when we reactivate a lapsed buyer, their gross merchandise sales in the next 12 months is actually even higher than a new buyer. They're very valuable buyers. I encourage any of you, just when you are having coffee with a friend, bumping into anyone you know, if you just mention Etsy, I guarantee the first three words that someone's going to say, "Oh, I love Etsy. I love Etsy." Even those lapsed buyers, they love Etsy. They just haven't thought to shop on Etsy recently. So it's that opportunity, which is another reason why driving penetration in the app, I haven't talked about the app yet, but Etsy is underpenetrated in app relative to many of our peers. A very big focus of ours right now is to drive more app penetration because we know it's stickier. Driving consideration, the app can really help us to do that. So as we have more explore opportunities on Etsy, not only are we showing you more of what we have on offer, but we're learning more. What are the items you're dwelling on? What do you appear to be interested in? That gives us the opportunity to do things like send you push notifications to bring you back more often because we've learned more about you. And the app is an important piece of that strategy. Can you help us think about the take rate? A lot of progress made there. Where do you see the low-hanging fruit from here largely? And as we think about initiatives like Etsy Ads and Offsite Ads, whether they can move the needle further. Yeah. So if you look at the midpoint of our guide for the end of this year, it suggests take rate will go up about 130 basis points this year. That is a very significant amount of take rate improvement, and we've done it in a way that's really win-win with our sellers. So I think there is a conventional belief that take rate is a zero-sum game. And if our take rate is going up, it must come at the expense of our sellers. That's not been the case at all this year. Our take rate's gone up because we've expanded Etsy Payments across more of the world. That just means that instead of our sellers paying a fee to a third-party service like PayPal, they're paying that same fee to Etsy, but for a better product because it's deeply integrated in the Etsy ecosystem. And then the improvement of Etsy Ads, and what that means is we're just doing a better job for any given search. We typically have at least hundreds, usually thousands of highly relevant paid Etsy items, paid Etsy Ads we can choose from. Picking the right one delivers a better buyer experience and a better seller experience, and the same progress we're making in search, we're also making in Etsy Ads, and the runway there is significant, so we continue to think just like search can get so much better, Etsy Ads can get so much better, there's still opportunity in payments. The gift card that I mentioned, doing much better with Etsy gift cards as an example of driving more payments revenue as well. We continue to see meaningful opportunity for take rate expansion in the years to come in a way that we believe can be win-win with our sellers. Can you help investors think about margins? What kind of investments do you need to set the business up for success? And how do we think about future investments that might be needed if GMS remains a challenge? The year of efficiency dialogue seemed very strange to me because I was thinking to myself, when was it ever not a year of efficiency? Isn't every year supposed to be a year of efficiency? At Etsy, since Rachel and I have been here, we joined at the same time about seven and a half years ago, every quarter has been a quarter of efficiency where we're just trying to think about what is the highest and best use of every dollar we can invest. And are we getting a good return? And we measure that quite carefully, both with our headcount investments and our marketing investments. And we care a lot about growth. We're very focused on if we invest another dollar, what kind of growth can we get from that? So when we see opportunities to drive profitable growth, we will absolutely lean into those opportunities. But we're very focused on profitable growth. We won't be a growth-at-all-costs company now. We haven't been in the past, and we won't be in the future. It's not our expectation. Not only because it's not a good use of shareholder dollars, but it also creates comps that are very, very difficult. If you invest too much in any given year, it might feel good that year. A lot. Of this year, I've gotten a lot. Of last year, I got a lot of "can't you cut costs and can't you get margins higher." This year, I'm getting a lot of "why don't you invest more to drive more growth." Both last year and this year, we're trying to invest the right amount so that each dollar we're investing is driving growth. We could lean in more this year to drive more growth, but if we were doing it in a way that wasn't profitable, what would next year look like? So we try to be very careful each year. I will say the core Etsy marketplace is delivering EBITDA margins of 30% or higher. We have best-in-class profit margins. We also have a wonderful financial model where we're very capital-light. It's a true two-sided marketplace. We don't touch product, and that means we're not building warehouses. We're not investing in inventory that may or may not sell. Sometimes that's not an advantage in this environment. If you invest in your own inventory, you can deeply discount it because maybe you bought too much last year. You put it on deep sale, and you drive some footfall. We're seeing a lot of that in retail and in e-commerce and some folks. But I love the fact that over time, we're a very capital-light business. We generate a lot of free cash flow. We're returning a lot of that to shareholders. In the last 12 months, we've returned about 90% of free cash flow to shareholders. But we will always be thinking about what's the right balance of investment to make sure we're driving growth. That's great. Great insight.