Good afternoon, ladies and gentlemen, and welcome to the Etsy Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Deb Wasser, Vice President of Investor Relations.

Thank you. Good afternoon, and welcome to Etsy's third quarter 2019 earnings conference call. Joining me today are Josh Silverman, CEO, Rachel Glaser, Chief Financial Officer; and Gab Ratcliff our Senior Manager at Investor Relations. Before we get started, just a reminder that our remarks today includes forward-looking statements related to our financial guidance and key drivers thereof, anticipated impact of our strategy, marketing and product initiatives and product development velocity on conversion rates and our future financial results including GMS and revenue growth, net improvements to our recent initiatives and the anticipated benefits of our recent acquisition of Reverb. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties which are described in our press release, our 10-Q filed with the SEC on August 2, 2019, and subsequent reports that we file with the SEC. Any forward-looking statements that we make on this call are based on our beliefs and assumptions today and we don't have any obligation to update them. Also during the call, we'll present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which you can find on our Investor Relations website. A link to the replay of this call will also be available there and if you'd prefer to access the replay via phone, you can find that information in the press release as well. We've created a slide presentation to accompany today's opening remarks and recommend you follow along. Note that much of today's discussion will focus on Etsy's results excluding the 6 weeks impact of our recent acquisition of Reverb unless we specify otherwise. With that, I'll turn the call over to Josh.

Thanks, Deb, and good afternoon everyone. Q3 was another eventful quarter. Its improving underlying fundamentals coupled with transformative updates to the business, which we believe laid the foundation for strong growth into the future. Etsy currency neutral GMS growth was approximately 23%, another quarter of sequential acceleration. And our overall take rate expanded 60 basis points to 17.1%. This resulted in revenue growth of 28% with healthy adjusted EBITDA margins of 22%. It's extremely rare to see a company in our sector with such strong sustained revenue growth while simultaneously delivering some solid profitability. We believe that this is continued evidence of the strength of our fundamentals, our execution and our two-sided marketplace model. When talking with many of you, we're often asked how much more runway Etsy has to grow. In 2017, our team reorganized to prioritize fast execution, streamlining and focusing on the areas of the business that have the highest probability of driving GMS growth. In 2016, our product development velocity was delivering approximately 200 experiments per year. We're now iterating much faster shipping an average of about 100 experiments per month in 2019 more than 5x Etsy's 2016 velocity with only about 6% more headcount. We continue to focus on what our buyers need and have a long road map of ideas that are in turn delivering incremental GMS and growth for our sellers. So let's dive into some of those initiatives. Etsy's collection of unique items is the foundation of our right to win. As of September 30, we had over 2.4 million sellers offering over 63 million items, the vast majority of which are unique or one of the kind. In Q3 we launched variation photos enabling buyers to visualize color or design variations without requiring a separate listing for each variation. And we…

Thanks, Josh and good evening everyone. Before I begin, please note that unless I say otherwise, all comparisons I'll be referencing here are for the Etsy marketplace only excluding Reverb. Our disciplined investments in products, marketing and technology have enabled steady growth of our marketplace and another quarter of strong results. In the third quarter, GMS accelerated on a currency-neutral basis to approximately 23% driven by continued execution in our product portfolio and improvements in marketing spend efficiency. Revenue grew 28% year-over-year and take rate expanded 60 basis points sequentially, driven by both Marketplace and Services revenue. Adjusted EBITDA margin was 21.9% or $42 million as we continued to deliver solid revenue growth and gain OpEx leverage. Let me give you more detail on our financial performance beginning with more color on our free shipping and Etsy Ads initiatives. First on free shipping. Since launching our new seller tool on July 9, we've been educating our sellers on the benefit of offering free shipping to buyers and how they can easily incorporate the cost of shipping into their item price if they determine it's right for their business. The initial impact of free shipping has resulted in lower prices for buyers. Also since June, the percentage of GMS with free or eligible for free shipping in the U.S. more than doubled to 81%. And in Q3, over half of our U.S. and global GMS shipped for free, up from 32% only one quarter ago. As Josh mentioned we are seeing more purchases per visit, increases to in-cart conversion rate and improved buyer sentiment, which we expect will have a beneficial impact to our business. We are pleased with that result and expect to see further benefit as consumers understand that the shipping experience on Etsy has improved considerably. There are…

[Operator Instructions] Your first question comes from the line of Kunal Madhukar with Deutsche Bank.

The question we've been getting from a number of investors regarding Etsy Ads and how that is kind of looking out. So the question is what has been the seller reaction to the change? Especially as some of our channel checks have suggested that some sellers could be cutting back on their ad budgets as they wait to see how their ROIs that changing under the new model. And as a follow-up has the initiative resulted in even modest cut in Etsy's direct spend on PLAs to date? Thanks.

Thanks Kunal. On the first question, we're really pleased with what we've seen with the seller so far. So as Rachel mentioned, we've seen no material churn in seller budgets and no material churn in seller adoption. So that's really good news and consistent with what we had hoped. Sellers are largely taking a wait and see approach and we want to make sure that we're sensitive and respectful to that. So we want to make sure that we take budget utilization up slowly only as we're able to deliver good returns to them. And you saw that Rachel shared the Google spend number in Q3 of $3.6 million, which shows that we are stepping our way into it. In the part of the third quarter which Etsy ads was left. To your second question, which is how does it impact our overall marketing spend. I mean, that's a great question. And let me take you through that a little bit. So first, we believe that Etsy Ads is foundational to our future and grows the pie of marketing spend in a really powerful and really important way. So we want to make sure we get it right in that. Part of that means pulling back on our own PLAs spend to provide an incentive for sellers to adopt Etsy Ads. It's really important that we do that. Now we also recognize that our own PLA spend is highly efficient. So what that means is that we're leaving profitable growth opportunities on the table because we want to make sure our sellers are incented to lean into Etsy ads. At the same time, we're really excited about television advertising as a profitable form of growth for Etsy and we think now is the right time for us to be doing that because both when you look at our brand opportunities and our brand challenges television is an effective channel to go and attack those and also because as we're asking sellers to invest in Etsy Ads it makes sense that we are investing in upper funnel and television as well. We also recognize that TV has a longer payback period. We're really encouraged by the results we're seeing but it takes a little longer to pay back than what we see with Google PLAs. So unit that out, we might be pulling back from PLAs or leaving some profitable growth on the table in the near term and investing in TV in ways that we think are really great for the long-term health of the business and really important for the business, but might lead to some growth and profit trade-offs in the very near-term.

Operator, is there a next question?

Yes. Your next question comes from the line of Heath Terry with Goldman Sachs.

I was just muted for a second. I was wondering if you could dig a little bit more into obviously improving trends in buyer frequency? And just if you could dig and maybe disaggregate for us some of the actual functional things that are driving that for you in terms of personalization, search, marketing spend? And then just, how we should think about that improvement relative to the guidance that you're giving us for deceleration in the core business growth in the fourth quarter. What's offsetting that piece of it? So just sort of help us understand sort of the counterbalances between those 2 things. I'd really appreciate it.

Hi, Heath, it's Rachel and thanks for the question. Let me just start with the second part of your question first and then maybe, Josh can you talk a bit about the product improvements that have been driving what we see as frequency gains. We pointed at two specific things that we think are headwinds that I guess you're backing into what you see as the acceleration in the fourth quarter. Of course, we haven't given fourth quarter guidance. One of those things is the marketplace sales taxes that we see as creating an additional 100 basis point headwind from what we had guided to at the beginning of the year. There are certainly macro factors that will - they're not something that we can control. We think we've appropriately forecasted that. But that's one of the items that is causing a little bit of compression in Q4. The other item that we talked about relates to the free shipping initiatives that we see because we - one of the levers that we have to incentivize sellers to increasingly adopt free shipping. We've pushed some of the really good search results off to a second page or further and that causes a decrease in conversion. So that search ranking is something of a headwind for us and overall our expectations on GMS growth had been higher. We thought more of the shipping cost is going to transfer into the item price than we're seeing today. Which means from the original forecast we gave that GMS is a little softer because that transfer isn't happening. So those are the - I think they are not substantive a business softness, but they are 2 discrete items that are causing some headwind in the fourth quarter.

The other thing I'd point out about those two items is that they are headwinds that last year and the new app. So these are not existential or fundamental changes to the business. What we've seen with state sales tax in the past is, it's the headwind that lasts the year and then you lap it. So we're kind of one month into that. And the same thing with what Rachel talked about with free shipping. Sellers are choosing to absorb more of the cost than we thought or pass along more savings to buyers than we expected. It does make the marketplace even more competitive over time and that's a headwind for 1 year and then you lap it. So I think it's important to kind of have that context. In terms of frequency, we're really encouraged that what we're seeing is first GMS per active buyer overall is rising and that's great. But I'm particularly excited that we're seeing the greatest strength among habitual buyers. So you've seen us talk about for several quarters now that habitual buyers are our fastest growing segment. And what that means is the people that know us best and love us best is the group that's growing the fastest. We think that Etsy can be a habit for a whole bunch of people, and it's about getting out there and telling the story of just the great breadth and depth of items that exist on Etsy and I think we're doing a better job than ever of telling that story. I do think it's early days. I think there is a lot more to do there, but I'm encouraged by the results that we're seeing.

Our next question comes from Edward Yruma with KeyBanc Capital Markets.

I know lots of puts and takes with all of the changes. But I guess - I know you tend not to comment on intra-quarter trend, but any sense as to how GMS changed once you started advertising free shipping or layering it in? And then I guess second, Rachel, I just want to clarify a point you made. I think you said that Reverb was a $2 million headwind. With that it on it's kind of as acquired basis and really how are they going to own it for the year or is that just for I think some benefit change it indicated? Just trying to strip that out and understand maybe the core Etsy gross margin. Thank you.

I can take the first. An interesting insight and I alluded to this a little bit in the script, but how are people reacting so far to free shipping. Well, we're seeing the strongest positive reaction in two populations our habitual buyers and people that are brand new to Etsy. So let's start with habitual buyers. These are the people who know us and love us the most and there was a thesis that maybe they think differently about shipping cost and Etsy. They hold us to a different standard and that does not appear to be the case. The fact that the people who know us and love us the most are the people that are having the most positive reaction to free shipping as measured by increases in GMS. Speaks to the fact that there is more goodness here even for people who know us. They really appreciate free shipping. And for people that are brand new to Etsy, their first ever experience with that is free shipping and that's having a positive experience. We're seeing that show up in GMS and conversion rate per visit and things like that. So what population is left then? It's the people who visit Etsy only occasionally and they are the ones where we've seen the least gain so far about free shipping and I think that's natural because they have an experience of Etsy that we have high shipping costs and they're not paying that much attention to us and we only are a few weeks in the talking about the fact that now free shipping is much more common on Etsy. And so that's going to take time. I think that's really natural to expect that changing perception takes a meaningful amount of time and we're just in the very first inning of that.

I'll take the second question, and I think maybe, Ed, you were also asking about Etsy Ads and the initial seller uptake on Etsy Ads. So the second question related to Reverb's margin contraction. There's two things, one of which is sort of a, it will be a permanent and that's in capitalization of internal development. We expect them to have a similar iterative product development culture and like we have at Etsy which we - and now that they're part of Etsy materiality levels go lower. So it will be less that we capitalize and more that we expensed in the P&L. And applying that philosophy to Reverb was an immediate hit to EBITDA. Is neutral to free cash flow. But that philosophy will carry through to next year and the year after. So you would expect that compressed margins on an ongoing basis. The other piece, which is we - well, and the other piece is at their benefits program, which also would be a permanent increase to their total comp cost because we've put them on Etsy benefits now. What we did say was that we expect Reverb to breakeven as we exit 2020. So you could model that into your run rate for your future modeling. And regarding Etsy Ads, Josh talked a fair bit about it. It's very, very early days in the Etsy Ads program. We've seen overall, I think one of the best metrics that we observe is that there has been minimal budget churn. So that means sellers that matter most are keeping their budgets in. Now we're looking at sellers that are getting very high returns that have captured their budget to demonstrate to them that they can actually spend more profitably. And then for the rest of the population to optimize the rollers that they're getting today to help improve that and then enable them to be able to spend more of their budget with confidence.

Overall, I think the seller action is just what we expected, which is I think that they're waiting to see how the returns are going to be. It's sort of a show-me kind of thing. And it's very much in line with what we would expect.

Your next question comes from the line of Shweta Khajuria with RBC Capital Markets.

Could you please give a little bit more color on the organic guidance. So there is 100 basis point impact from the tax and then 100 basis points from the shipping initiative, but just if you could discuss what gives you conviction that that could improve? So for example, maybe you do show search results for those who are not offering free shipping because conversion is better and it impacts GMS but you offset it with something else or that international tool that you're planning to launch in 2020 for international sellers. Can you talk about what gives you conviction that there could be a greater transition from 60% today to probably 80% in the future that could help GMS growth? Thanks.

Yes, absolutely. So if you're speaking about - just so I'm clear Shweta. You're speaking about conviction around penetration rates of free shipping over time getting from 60% to something higher? I just want to make sure.

Yes. Well, you're expecting a 100 basis points of headwind based on the organic guidance that are on 20% and some of it is 100 basis points from the lower than expected conversion from the search results as well as the 40% penetration so far because some international sellers may not have adopted it yet or people who have heavy items may not have. So what gives you conviction that there is more upside there in addition to habitual buyers also continuing to adapt and the non-habitual also continuing to adapt this?

There is discrete populations and we've really worked hard to segment who is having what issues and concerns. And so we talked about a couple on the script. For example, people who have items under $35 and that's complicated. Right, I have an item that's $20 and so if you buy only one of them it doesn't have free shipping but if you buy 2 it does. How should I think about incorporating shipping cost into the item price if there is a chance you might get free shipping and a chance you might not? So we've just launched a tool to help sellers, think about that that uses things like historically how many - what percentage of your people by more than 1 item. We're doing similar things with international sellers. And so we're going to do the best we can do to educate sellers and give them tools so that they can make good choices. Why do I say good choices? Because they seem to be absorbing more of the shipping cost than we think buyers value. Meaning that there wasn't an indication before the buyers thought that things on Etsy were too expensive. And so we're going to do everything we can to give them tools and education. And I expect that will improve over time. However, let's say, it doesn't. It's a one-year headwind and then you lap it and it passes and the result of it is that the Etsy marketplace is even more competitive. So ultimately we do a lot to give tools and education and training to our sellers. Ultimately their pricing strategy is theirs. In either case, we'll make progress and things improve this year or we lap it and or we continue on in payments.

Just to add. Our search algorithms our composite of many factors that go into them. Right now free shipping is weighted more heavily and it pushes the listings that are not free shipping or free shipping eligible to a lower page. But we have going forward, a lot of other ways to incentivize sellers to adopt. There is a lot of things that we can do to that free shipping to the search algorithm composite. So over time, we could play around with that. I call it a cocktail of ingredients that go into that search result and we will. So we test everything at Etsy and going forward we'll be experimenting with that as well. The other point I would make is that we only started marketing to buyers that Etsy is a place to think about for free shipping in September, and so the more that buyer - when we said 70% of listing views today are offering free shipping. So that's - the more buyers understand and resonate that Etsy is a place where you can get free shipping like you can on most e-commerce sites the more that becomes an incentive for sellers as well. So over time, that's a little bit of a nice virtual ecosystem that we expect to happen.

Your next question comes from the line of Nick Jones with Citi.

I want to kind of search and discovery. This has been an area for improvement that gets mentioned kind of each quarter. And then we see things like promoted Listings and free shipping impacting and search results. And then I guess on the other side, I imagine, maybe some infrequent buyers come to the site looking for maybe more random or collective things. So how should we think about how you balance making Etsy a place where buyers can come and find things that maybe they're not quite sure that they want or they are looking for something that's really unique versus really providing kind of a tailored or curated experience? It seems like that's a challenge.

Well, I think we're up for the challenge and we're making great progress. So, I think what I read in the second part of your question, there is a treasure hunt versus the targeted search, which we think about a lot. There are people who show up in the state of mind that's just want to be inspired and there is people who shop at a very specific purchase occasion. And we have a lot of science we apply to that. Things like, for example, what's a head query versus what's a tail query. And you respond to those very differently in terms of the breadth and diversity of search results that we offer. I think we have a fantastic team and we're applying a lot of science to get ever better. To your second question though about things like promoted Listings and using saying that only free shipping items will be on the first page of search results we make balanced trade-offs for the best interest of the business and we think that it makes sense for the business that we set an expectation that buyers will often find free shipping on Etsy. We think that is absolutely the right thing to do for the business into the long-term health of the brand and therefore for all of our sellers. And in order to do that, we have a set of carrots and sticks at our disposal to encourage sellers to adopt that. What shows up on the first page of search results is one of those. So we decided that we're going to reserve the first page of search results for things that offer free shipping at the moment and that's had a meaningful impact on seller adoption. What it may take to get the next sellers to adopt might be different. Helping them think about their specific needs around items under $35 or international items or heavy items, for example. It might be different than using the first page of search results. But I think what matters is that we're very much building this business for the fundamental strength of the business over the medium term and the long term. And we think we're doing that in the right way in a very data-driven way and we feel good about where we are.

Your next question comes from the line of Rick Patel with Needham & Company.

Thanks for taking the question. Can you talk about the opportunities to improve margins at Reverb? Right off the bat, your filing show that the transaction fee there is about 3.5%. So curious if there is any plans near-term to make that comparable to Etsy's. And as we think about the long term, are there any structural reasons why margins there can be comparable with Etsy's?

Yes, I don't want to comment on things like transaction fees right now. What I would say is that we think that there's a lot of commonality between their two-sided marketplace model and our two-sided marketplace model and we think there's a whole lot in common between the way you run our two businesses and so the same kind of things we thought about it in terms of how to drive more customer value, a better buying experience, a better selling experience, driving more marketing and then having a fair exchange value. Those are the kinds of things that I know that the team at Reverb are going to think hard about. But to your fundamental question of margin structure over time. It's another two-sided marketplace, a lot like Etsy and we think those are great business models and overtime share pretty similar economic characteristics.

And let me be a little more specific on take rate. We told you what the blended take rate is for Reverb plus Etsy. It's about 16.4% and we expect that is a good number to use going forward for the time being.

Can you also talk about your outlook for the upcoming holiday season? So we have a much tighter shopping window between Thanksgiving and Christmas this year versus last. So just curious if there's anything you're doing differently versus last year in terms of just the timing of marketing or conveying the importance of fast shipping to your sellers.

So one thing that we've done was we were - we've been on television with our ad campaign since the beginning of the quarter. Last year we started it later, so there is more region frequency that will be accumulating over the quarter versus what we had done last year. The other thing, when we think about the shorter time between Thanksgiving and Christmas, Etsy typically has a shorter buying season anyway because we do have a longer lead time for ordering things that are going to be made and customized for you. That might be a headwind. Right now we expect we'll probably experience similar to what other e-commerce companies would experience with that and we don't know. The last time that short window happened was a long time ago for us. I think 2012. And so we were pretty young immature company at that time so we don't know how heavily that could impact us. We think we've got our quarter forecasted properly but that could be a potential downside.

Your next question comes from the line of Laura Tampine with Loop Capital.

It is also on the reverb take rate. I mean, that 7.8% I think compares to your own 17.1%. Is that gap mostly just the rate charged or do services make up a very significant portion of that gap as well and are those services and things that you would expect to add to Reverb's portfolio of products in a hurry?

Yes, it's a good question. So Reverb was very intensely modeled after Etsy and so their fee structure reflects that. So there is a 3.5% transaction fee. They don't call it promoted Listings. They call it bump. They have a set of optional features and a couple of mandatory fees that look a lot like Etsy. So I don't want to comment on their take rate. It will be up to that team to think about how to make sure that we're doing the right value exchange and building value. What I would say is that we think there's a lot of commonality in terms of how we can drive a great customer experience and over time make sure we get the value exchange rate as part of that and we're excited about the future.

Your next question comes from Jeff Helfstein with Oppenheimer.

And great color in the slide that was appreciated. Could we just go over to some numbers? So I mean, if we take the Reverb revenue that you disclosed for this quarter. I don't know seasonal that business is, but let's just say we guess it's like $12 million to $14 million in the fourth quarter for a full quarter. And then you've got the consolidation of Etsy Ads which you said it was about $4 million. Would you maybe want to tell us what that was last year? Otherwise, if we kind of guess, call it $6 million this year, but again, don't know seasonality would that imply that you're cutting organic revenue about 3% to 4% versus last guidance? So that's the question. However, you can help would be appreciated. And then in the deck when you talked about the larger than previously expected impact from sales tax. What you did talk about are you also seeing something on international? Because we did notice international was 36% of GMS. It was 38% last quarter. Obviously Reverb impacts that because it's mostly U.S. or all U.S. and just anything different you're seeing internationally. Thanks.

Jason, I think the - blended - just married you and Jeff together or something. Thanks for your question. Honestly, I'm not sure I can precisely answer the first question because I didn't follow, but maybe a follow-up call we can get closer to the answer. I would just remind you, I think you were just doubling the revenue we got for Reverb in the 45 days of revenue we had for Reverb and doubling that for the fourth quarter. But remember, the fourth quarter would be bigger for them seasonally too. So that would be one way to think about that. On the - I know there is more to your question. I kind of lost the plot a little bit. So let's take that on a follow-up. And then on the international versus domestic - one thing is remember I think we had increase in U.S. demand. I tried to point that out with the U.S. buyer GMS number because the U.S. demand is helped by a pretty robust television campaign that we're only running in the U.S. right now. So that would be hardly the-- when you're looking at it from that perspective that would be something that would be impacting international versus U.S. And you're absolutely right that Reverb is a much lower percentage international versus U.S.

I didn't 100% follow either, but I guess I would add is color that we gave you - we tried to give you roughly what percentage of GMS and revenue that's in our guidance you could attribute to Reverb to try to really help. The other thing I would add that I think might help is that we think that the third-quarter take rate is going to be very indicative of the fourth quarter take rate. And so if you think about where our take rates are, we said that GMS we feel really good about our position for the fourth quarter. We think we're doing a lot of things that are working great and that there are two very discrete headwinds that state sales tax is about 100 basis point headwind and that we think that the sellers absorbing more of the cost of free shipping is about another 100 basis points of GMS headwind. So if you think there's maybe 200 basis points of GMS headwind that we're signaling anything the take rates are going to stay pretty consistent. Hopefully, that helps.

So maybe, then just ask a follow-up, maybe you can talk about it. So given there is always questions about power sellers versus long tail on Etsy Ads and everyone's got different checks et cetera. Clearly, you're making a big bet on the long tail and kind of the medium to smaller seller with Etsy Ads. Just maybe talk about how long you expect that to play out. Again, you're seeing puts and takes right now between maybe happy versus unhappy power sellers but at what point like do you see it like additive?

Etsy Ads? I know that's a good way to ask it. Look, I think the seller reaction has been pretty good and I hope I don't miss signal that. We always try to be muted in these calls, but the seller reaction has been good. And the evidence of that is that as Rachel said budget churn has been immaterial as part of this program. So sellers are waiting and seeing. They're not pulling their budgets. They are not doubling down on their budgets. They're basically keeping their budget the same and they're going to see how much more of their budget we're going to use and what they get for it. By the way, when a seller spends $1 it takes about 30 days to see the results of that flow through the model. So I think what you should expect is that we're going to grow and scale this program over time. We're not going to step function it because I think that's more than what our sellers want or would be prepared to absorb. So you're going to see the scale over a period of time that's going to go well beyond 2020. But certainly, I think we're going to make material progress through 2020, but it will scale. I think to the point I made earlier, you'll probably see us lean into TV and upper funnel and pull back a little bit from performance marketing even ahead of Etsy Ads because we think we need to pull back on performance marketing a little bit to help encourage sellers and lean into TV. If that makes sense.

The next question comes from the line of Mark Kelley with Nomura.

I just kind of a follow-up on the puts and takes the 100 basis points headwind from sellers absorbing too much of the shipping cost and the 100 basis points from the sales tax issue. Is it safe to say that - and this is just a Q3 question not about your outlook. Is it safe to say that your upper funnel marketing campaign drove about 300 basis points of re-acceleration given where you guys shook out and if so, did that kind of play out to your expectations? And the second one is, is there anymore color you can provide on what kind of changes you need to make to Google Shopping Ads? I know you said you're working with Google, but any more color there would be really helpful. Thank you.

Yes, so on the first one, I don't think we're prepared to sort of give that level of specificity on TV. What I would say is we feel good about the TV campaigns. We feel like they're delivering just in line with what we'd hoped. So we feel good about that. In terms of both on the actual impact on traffic and sales which we have ways to estimate and approximate and triangulate and we feel good about. As well as what we're seeing in brand sentiment. So if you look at the population who have seen the ads and the population who have not seen the ads and you look at things like awareness, consideration and intent. We see meaningful lifts among the population who have seen the TV ads and that's - we feel good about that. So as I said a minute ago in terms of how you attribute the math, what might make it a little tricky this quarter, is you saw us pull back on performance spend maybe a little harder than we might have left some good spend on the table because that's important for driving Etsy Ads. And you've seen us lean into TV, which we feel good about and has a longer payback period and so both of those things need to net out. And the second question?

Any more detail on how we can improve return on ad spend for our sellers.

Yes. So we're early days of working together with Google and Google Shopping and we're really encouraged by the progress we've already seen on that. So you get a sense that that program has been relatively small in the past and we think it can be much bigger and that's grounds for a really great partnership with Google, who have been great partners. So things like how we set up campaign structure, bidding strategy, what kind of targeting data Google are able to use and things like that. There's a lot of optimization that we can do together to make that campaign perform even better. It's performing well. Just better and better performance is always helpful and we're really pleased by the progress we've seen.

Another note, I would add to that is - I'm just repeating what we said on the call, but there is a significant group of sellers that are getting a significant return on their ad spend and they've elected to sort of limit the amount of budget that they're willing to spend. So part of the job is on us to demonstrate to them that they are leaving money on the table by not spending more. So that's easier said than done. I think that we are working hard on giving them the analytics and the insights that we have because we can see it, so that they can make those decisions.

And there are no further questions at this time.

Thank you all for your time.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.