Hi, everyone, and welcome to Etsy's Q2 2024 Earnings Conference Call. I'm Deb Wasser, VP of Investor Relations. Today's prepared remarks have been prerecorded. Joining me today are Josh Silverman, CEO, and Rachel Glaser, CFO. Once we are finished with the presentations, we will take questions from our publishing sell side analysts on video. Please keep in mind that our remarks today include forward-looking statements related to our financial guidance, our business, and our operating results as noted in the slide deck posted to our website for your reference. Our actual results may differ materially. Forward-looking statements involve risks and uncertainties, some of which are described in today's earnings release and our most recent Form 10-Q, and which will be updated in future periodic reports that we file with the SEC. Any forward-looking statements that we may make on this call are based on our beliefs and assumptions today, and we disclaim any obligation to update them. Also during the call, we'll present both GAAP and non GAAP financial measures, which are reconciled to GAAP financial measures in today's earnings press release or slide deck posted on our IR website along with the replay of this call. With that, I'll turn it over to Josh.

Thanks, Deb. And good afternoon, everyone. We're pleased that Etsy's consolidated results came in at the high end or ahead of our guidance. GMS was $2.9 billion, down about 2.1% year-over-year on a consolidated basis. Revenue grew 3% to $648 million and we posted a very healthy adjusted EBITDA margin of approximately 28%. Etsy marketplace GMS was down about 3.2% year-over-year, a 210 basis point improvement from our Q1 performance of negative 5.3%. Etsy marketplace's record high level of approximately 92 million active buyers held up very well in another challenging quarter for our type of goods. While we continue to face stiff macro headwinds, we're making meaningful improvements to the customer experience, which we believe are beginning to inflect the curve along our journey to get Etsy back to growth. We also announced today that Rachel is planning to retire. She's been a strategic partner and a key to the tremendous success Etsy has achieved since 2017. I believe every CFO wants to be measured on results, and Rachel has so much to be proud of in that regard. Beyond the numbers, Rachel leads with optimism and heart, helping craft our culture and our team's operational excellence. She's built a strong team, and I'm grateful she chose Etsy to serve as the culmination of her impressive career. Our entire community will continue to benefit from the impact she's made. We're going to have some more time together, and we'll stay focused on driving Etsy’s success. You'll all have ample time to chat with her over the coming months as we launch a search for her successor, and, of course, we'll share updates with you at the appropriate time. As a reminder, our key focus for 2024 is to continue to build consideration for Etsy to help buyers think of…

Thanks, Josh, and thank you for joining our call. My commentary today will cover consolidated financial results, key drivers of performance, and Etsy marketplace standalone results where appropriate. As a reminder, we divested Elo7 on August 10, 2023, so please take that into consideration when you compare year-over-year consolidated results. Etsy's second quarter 2024 consolidated GMS was $2.9 billion, down approximately 2.1% year-over-year with a 20 basis point FX headwind. Revenue increased by 3% year-over-year to $648 million, and adjusted EBITDA was $179 million, representing a healthy 27.7% margin, up 130 basis points year-over-year and ahead of our guidance. Note that Elo7's divestiture resulted in small headwinds to GMS and revenue growth in the quarter that was modestly accretive to our consolidated adjusted EBITDA margin. The Etsy marketplace GMS continued to face ongoing headwinds from tough macroeconomic environment, yet results came in a bit better than we had anticipated, with the $2.5 billion in Etsy marketplace GMS representing a 3.2% decline on a year-over-year basis, and better than the 5.3% decline in the first quarter. In addition, strong Depop performance contributed a nice tailwind to consolidated GMS. I'll cover Etsy marketplace GMS performance in more detail later. Our consolidated year-over-year revenue growth of 3% can be attributed to solid growth in our marketplace revenue, which increased 3.8% year-over-year, primarily driven by payments and offsite ads. We continued to drive Etsy Payments expansion with penetration of our payments platform now at about 98% of Etsy marketplace GMS. We saw a nominal revenue increase from our new seller onboarding fee, which was rolled out in additional regions at the beginning of the second quarter. When combined with stronger trust and safety efforts, this new fee is helping to reduce fraudulent onboarding, protecting both our marketplace and existing sellers. Consolidated services revenue grew…

[Operator Instructions] Our first question will come from Jason Helfstein with Oppenheimer. You may now unmute your audio and video and ask your question.

Hi, Jason. Hi.

So, before I ask the question, I want to say this is probably where our third rodeo, so maybe there'll be a fourth. I think going back to, was it home.com or…

Move, you're thinking of Move.

No, but it probably moves home store, right?

Yeah.

Anyway, so it's definitely been a blast over the years.

Thanks, Jason.

So, question. So, Josh, I want to dig into the new seller classification program. When do you think you'll be able to tell if ultimately when it improves buyer conversion, which then ultimately presumably gives you confidence to lean more into marketing and kind of just get the flywheel going. So that's just a timing question. Second, any thoughts on getting your sellers to raise their prices? Thanks.

On the first one, I actually not sure it'll raise conversion. I hope it'll raise frequency. So our search engine right now is really optimized for conversion, which is why we have historically shown you, for example, multiple very similar variants of an item. If the black box algorithm thinks the most likely thing you're going to buy is this, it might show you eight variants of roughly the same thing. And if that's actually what you wanted for the 2% or 3% of people who are really ready to buy that thing, that was a great experience and drives conversion. But what about the other 97% percent who really weren't necessarily ready to buy? We would be much better served to show them a broader variety of things so that they understand everything we have on offer, whether they're going to buy this session or come back more often. So I think what we're going to end up with now, dramatic improvements in the diversity of items we're showing on Etsy, the diversity of sellers we're showing on Etsy, I think is going to drive a lot more people to say, wow, there's a lot more stuff for sale than I realized, there's more categories of items for sale than I realized, and they're going to come back more often. That's what I'm really excited about. In terms of getting sellers to raise their prices, we're a marketplace, and sellers set their own prices, and we're not telling them how to price. We do give them market information to help them price. I think the more we can do to emphasize the humanity of Etsy and the Etsy seller, the artisanal craft role that was played, the more we can give the seller her rightful pricing power. And so you should expect to see in Etsy in the quarters to come us doing more and more to center the seller, her role in the making process, things like video of her actually making the thing. So you really understand how artisanal the item is and that I think is going to really support our sellers and their pricing power. And I'm excited about it.

And just add a note to the frequency comment you made, because you asked about when it can get the flywheel going again. Increased frequency obviously drives up, what, life-time value. So we can actually get the marketing flywheel go in that way, more frequency is a good thing.

Yeah.

Thanks, Jason. Operator, next question.

Our next question comes from Jian Li with Evercore. You may unmute your audio and video and ask your question.

Okay, I think that's me. Sorry, guys. Yeah, first, congrats, Rachel, on a really good run here. I just have a question on the shape of GMS growth recovery through the back half of the year. I guess like a couple of things, like how has macro changed versus three months ago? Has it gotten better or worse versus where you stood three months ago? And why wouldn't we expect GMS recovery to continue sequentially, given that you're leaning more into marketing in Q3 and all these product initiatives in the back half?

I can start with the macro and that we're seeing -- I'd say it's been sort of tough sledding, pretty volatile. So we see -- when we look at external data, we see things going in a positive direction. We see things going in a negative direction. What we've experienced Q1 to Q2, it's probably about the same amount of pressure and the guidance that we gave says we expect about the same for the rest of the year. If it were to get worse, that would influence the forecast that we have. We -- there's a lot of other [mine chair] (ph) events that are going on in addition to macro. So we had attempted presidential assassination. We had a pretty volatile -- pretty exciting and volatile democratic competition going on right now. We have Olympics, we have I think Wimbledon, World Cup and one other European soccer going all on the same at the same time and those things in addition to macro tend to influence our -- we've always talked about what we call the CNN effects, so it influenced our outcomes. So we're fighting against those things that go one direction, but in the meantime, we're really planning for a great Q4, particularly with investments in quality, as Josh just talked about, and Gift Mode, which keeps getting better and better with new product launches getting ready for the holiday season. So there's a lot to be excited about, just cautious with this environment.

Okay. Thanks, Jian. Operator, next question.

Our next question will come from Nathan Feather with Morgan Stanley. You may now unmute your audio and video and ask your question.

Hey, everyone, and congrats, Rachel. It's been great working with you.

Thanks, Nathan.

A few quick questions on the new loyalty program going into beta. So first off, who's the primary customer you're targeting here? Is it primarily that repeat customer that maybe isn't habitual yet, but you think you could bring them over the line? And then can you talk through how you're thinking about pricing that program and the goals for profitability?

Great question. Yes, so all great questions So the target customer is people who shop only occasionally on Etsy. Think people who shop three or four times a year. And the idea is by having a paid loyalty program, once you're paying, you want to get value out of it. So the idea is, can we take those people and turn them into people who every time they're shopping for something, think, let me start on Etsy, start all of my shopping missions on Etsy, or many of my shopping missions on Etsy, we're particularly excited to test what would happen if shipping costs went away. And I want to be clear, Etsy is funding this. We're not asking the seller to fund this. And obviously the fees we will charge to the buyers will help fund it. But that's going to be a very interesting experiment. And then we're also leaning a lot into emotional rewards. So think deals and drops, special value and new product releases for customers. We think all of this, we can create something very exciting. We don't have specific pricing that we're ready to announce yet, but we're thinking in the range of the cost of a latte per month kind of things. We know people are very value conscious right now. And again, we're not targeting our most loyal, most habitual buyers who already come to Etsy to shop for many, many of their missions. We're targeting more occasional shoppers and seeing if we can upgrade them. So we think something in the range of the cost of a latte is probably about right.

And just, Josh said it in his prepared remarks, but it's an invitation-only beta right now. So it's a very limited group of people and then we'll learn and iterate from there.

And you asked about profitability. Obviously, everything we do, we want to be profitable in time. I think in the beginning, we're going to test and learn on this one. And I think the program, I would expect the program to evolve. I spent 4.5 years at American Express, which not only runs a massive loyalty program of its own membership rewards, but it partners with Delta and Starwood and so many other loyalty programs in a really deep way. So I've had a chance to look at the loyalty market for a long time. And typically these programs evolve and you learn a lot about how to make the economics work. And I expect we're going to be on a bit of a learning curve here. I'm really excited about that and I'm quite optimistic about what this can be in the future.

Great, thank you. And yeah, we don't get invited because we're habitual.

It's a de minimis impact to margins in 2024.

Great. And looks like we have the next -- operator, you want to just introduce the next one?

Our next question comes from Shweta Khajuria with Wolfe Research. You may unmute your audio and your video and ask your question.

Hello. Thank you for taking my questions. Rachel, it's sad to see you go and I wish you all the best.

Thank you.

But at least from my side, definitely will miss you. Two questions, please. One is, just at a high level, if you could talk about, Josh, what do you think is the most exciting as you think about all these different initiatives and everything that you're launching for 2025? There is a lot of concern around consumer spend pulling back around competition, et cetera. So what would you say to those who are doubting that there could be positive growth for next year? And then second is a follow up on the prior question actually, how -- why did you decide on this strategy now on the subscription? And what was the reason for launching it now? Thank you.

Great. Thanks, Shweta, and congrats on your new gig. It's nice to see you. Okay, two questions. The first is economic outlook and what am I excited about and why should we be excited for 2025? I guess I'd start with, if you ask five economists their opinion on 2025, you're going to get six opinions. So we're trying to control what we can control. And we can control having an amazing and highly differentiated customer experience. So in a world where, it may feel like we're swimming upstream in the economy, I think first we're maintaining our position when swimming upstream. And I think we're getting a lot stronger for it, which is going to position us even better. And most importantly, we're not going to get pulled downstream. We're not going to be part of that race to the bottom. We're leaning into what makes Etsy even more Etsy. We're leaning into differentiation. And I'm so excited about, if you ask me about the things we're doing in gifting, we're seeing some green shoots here that are really encouraging, the performance in Mother's Day, then Father's Day, then graduation. I'm encouraged that that strategy is showing some encouraging green shoots. I am really excited about the quality work that we're doing. When we say 50% fewer searches have a high preponderance from one seller. 70% fewer searches have multiple items that appear to be largely identical. I think that what that can do to the customer experience over time, we've done a ton in the past to suppress items that violate our policy. Now we're really focused on elevating the highest quality items on Etsy. Soon, we'll be launching to our sellers a dashboard showing them how we score the quality of their items and the quality of their service level, creating even more of a race to the top for sellers, so they have agency over how to rank higher in search. And that makes the buyer experience only better and better. I am super excited about elevating the very best of Etsy, letting our sellers shine, helping our buyers understand the role that the seller made in that process, and really differentiating Etsy. I think it's an exciting path, and I'm really encouraged by the early start we're on right now.

And, Shweta, we're not giving 2025 guidance here, so the other part of your question was, do we see growth next year? We did show data on this call that talked about the categories where we see last quarter we were down in every one of our major categories along with many other competitors in each of those verticals. This quarter, we saw improvement in all of those categories except for one and two of them are actually flat and positive. So we're starting to see the green shoots that we want to see in the categories that are most important to us.

I think there's a second question from Shweta which was, why loyalty now?

Why loyalty now? Consideration is a huge focus for us. People love the experience when they're on Etsy but they only think of us, they only, very often, I think a way to think of Etsy is we're the place to go when you can't find it anywhere else. And we've been amazing at that and we've gotten better and better at that. And you know what? If you want it and you know what you want, we have it at Etsy. And we've gotten great at showing you it. And for a few years, there was a period of time when you couldn't find almost anything anywhere else. And we were the beneficiary. Since that time, we've done, I think, a remarkable job replacing almost all of that GMS with other GMS here at Etsy. But we want to move from being the place to go when you can't find it anywhere else at the end of your process to the beginning of your process. We want you to start at Etsy. I'm planning a wedding. I just had a baby. I'm redecorating my home. At the very beginning, we want you to start on Etsy. And we know we have so much opportunity there. And we've not been great there. We think we have an opportunity to become really great there. And I think that LLMs are going to really help organize this enormous corpus of listings we have to be understandable by humans, help to navigate it and make it a great starting point. So a loyalty program is a way of saying, hey, join our loyalty program and start your commerce missions. We want you to pay a little bit of money every month. And now that you've made that commitment, we want you to think every time you're buying something online, why don't you start that mission on Etsy? We tested paid and free together. And if you launch them together, they tend to cannibalize. The free tends to cannibalize the paid. So we thought better to start with paid, not saying we would never do a free. I'm saying we're going to evolve. We're going to test. But our consumer research suggested if you're going to test, best to start with a paid program.

Great. Thank you. Operator, next question.

Our next question will come from John Colantuoni with Jefferies. You may now unmute your audio and video and ask your question.

Hi. Thanks for the question. I just wanted to ask one on marketing. So on the performance marketing side, up 31%. I think that's the biggest increase since 2020. Given that that is currently significantly faster than the trajectory of GMS, just talk about what gives you confidence that once you recalibrate the trajectory of performance marketing to better balance growth and profitability, that you won't see a big pullback in GMS. Thanks.

Can I start with -- first of all, last year in Q2, we did pull back on marketing spend because we were running incrementality tests during that quarter. So the base was sort of not a normal base. So that's one of the reasons for the growth in this year's Q2 marketing -- performance marketing spend. We also spent a bit of time talking about, we've been able to, and we've done this throughout to test our way into two new channels. And we will test for a while until we can optimize to get them ROI positive. And we've been very happy and excited to see that on paid social and paid social video. Those are new channels for us and we've been able to bring them up to be ROI positive. And we showed a chart that shows that they're an increasing percentage of our total performance marketing spend. And that's not instead of PLAs and other existing channels, that's in addition. So we feel confident in those investments as well. And then the other things that we're testing is more markets outside of the US where we've seen really positive growth in some of the -- some of those countries that are non-core to our top six. And so that’s -- some of those are in the phase of incubating them and optimizing them to get them ROI positive. And some of them are actually producing at this point. Do you want to take the second part of his question? The second part, John, was how do we have confidence that those are, I guess, not be dilutive to margins over time?

Yeah, I mean, we always have a lot of discipline on, when we invest a dollar, are we getting a meaningful return back all the way down the marginal return curve? What I'm encouraged by right now is we're starting to make progress on paid social. And I think that's really helpful for us. And it's an area that we want to lean in. And when I talk about going from the place to go after you've looked everywhere else and you already know exactly what you want, that's really a PLA, right? I know exactly what I'm looking for and I've searched for it in Google. To a much higher level use case like I'm generally planning a wedding, Meta, YouTube, these places are much better at these very high level generalized use cases. And the better we can get at targeting those users and then having a landing experience that's highly organized that takes you from mid-funnel consideration all the way down to here's the really the few items that make the most sense for you, all the way down to here's what you're going to want to buy, I think that unlocks a whole new opportunity for us. So I'm encouraged by the progress we're making in paid social. We're always going to have a strong eye for ROI. The other work that we're doing on quality for example on loyalty, on app centric, is really to make sure that once we've engaged you, we're really pushing to engage you in the app and then get you to come back again and again and build that frequency loop. And that's going to be another big unlock for us.

And just one last note is that we did reiterate that we expect our full year margins to be at least as high as last year's margins. So we have confidence in the way the marketing dollars are going to flow for the rest of the year for us to be able to achieve those margins.

Great. Okay. Fantastic. Next question, operator.

Our next question will come from Rick Patel with Raymond James. You may now unmute your audio and video and ask your question.

Hey, guys. Nice to see you. Rachel, congrats on an amazing career. I'm sad for us, but really happy for you in your next chapter.

Thanks, Rick.

Can you talk about your efforts to emphasize value on the marketplace? So, how are you working with sellers to communicate the importance of offering sharper price points and discounts. And secondly, how do you execute that in terms of making sure you put the right deals in front of the right buyers?

Yeah. So, the efforts we've had in place in the past continue in terms of having a robust toolkit for sellers. So they can put their items on sale. They can offer discount to a returning customer. If you've left an item in checkout, they can offer you a coupon to get you to come back and close. And we see sellers continue to use and adopt those tools. We, have, for example, as part of the loyalty program, deals and drops, we're going to be highlighting things that we think are really cool value and really special value. We want to lean more into discovery on Etsy, where we highlight things we think are cool and we don't put all the effort on the buyer to have to have the keyword in mind already and search for it. But the main thing I want to emphasize in this call is we're investing a lot more in the differentiation of Etsy. Who's the human behind the item and what was her role in the process and really elevating that. And I think there's a big opportunity in our user experience for us in the coming quarters to do a much better job centering the seller and her role. And in doing that, I think it can really emphasize how special this item is, how artisanal this item is, and give her more pricing power for the value that she deserves. And that's an area that we want to lean into as well. I think it's important.

Another good example you might want to do is just -- it was on the prerecord for the demifine.

Yeah. So, look, if we look at our jewelry category, jewelry under $10 is under a lot of pressure right now. And there was a period of time when malls were closed. And so you couldn't buy jewelry many other places and Etsy sold a lot of jewelry under $10, but jewelry under $10 might have $5 of shipping. It's not obvious that, buying it on Etsy is going to be the place where we're going to shine. And I'm not saying there isn't wonderful jewelry under $10 on Etsy. There is. We have wonderful sellers who sell that. But demifine jewelry of let's say value between $1 and $200, we have amazing value there. And those items are growing quite nicely. For example, engagement rings on Etsy. You can buy a beautiful engagement ring made just for you, often to your specifications, for a price that's a fraction of what you'd pay in the mall. That's an area where we have real competitive differentiation. We have a real right to win, and we want to make sure that those sellers really get elevated and get a chance to shine. So we're leaning in a lot more there. It's another place actually to talk about LLMs. One of the challenges is we have such a diverse set of inventory there, that getting all of the attributes for all of those items labeled accurately has historically been a challenge for us. That's a task LLMs are doing quite well. So we've asked LLMs to go after our whole jewelry category and tell us what's the material, what's the carat, what's the weight of it. And it's doing quite a nice job and then allow us to do things like filter. What are the filters a customer would expect? How do we apply those attributes and create a more organized shopping experience starting in jewelry? And we're seeing LLMs there have a very nice effect.

Great, thank you. Operator, next question.

Our next question will come from Chris Kuntarich with UBS. You may now unmute your audio and ask your question.

Great, thanks for taking the question. Could you just talk about sustaining the ‘23 EBITDA margin for ‘24? Is this really just a ‘24 dynamic or is there really a willingness to revisit this against a different backdrop? And then, Josh, can we really zero in on the app? Who's using the app today? How does engagement maybe differ from buyers that were pre-COVID versus new buyers? 42% of GMS is a very material amount. Just any color you can kind of share on that. Thanks.

So what we love about our model is that we have a very variable cost base relative to our fixed costs. So when we drive much higher GMS and revenue, a large percentage of that flows through to EBITDA. We demonstrated that for many quarters when we were in the peak of our pandemic wins that we were showing tremendous flow-through to the bottom line. And since then we've continued to maintain the Etsy standalone margins. Most of the contraction we've seen has come from the addition of our subsidiary. So we've really kept both those things steady, the amount of contraction from our subsidiaries and the amount of Etsy margin. And we've been doing that in spite of flat to down GMS and modest increases in revenue. So what we expect going into the last part of this year is we expect to see, we have a traditionally higher fourth quarter GMS and revenue because of holiday sales. So that happens against the backdrop of this relatively high variable cost base. So we see higher flow-through to bottom line during that period of time. And we see some things working in our favor versus last year where last year, for instance, we had the sequential from Q3 into Q4 on above-the-line spend, there was a bigger increase than we're expecting this year. Last year, we saw a higher cost of revenue related to fraud that we don't expect to see this year. And we've been working really hard on things like that in our trust and safety organization to make sure that we keep those costs as low as possible while also keeping our marketplace safe. So we feel very comfortable about the level of our margins. We are a very productive and very lean organization. We showed a slide in this deck that showed revenue per headcount. And when we've been asked in the past about, why not reduce your costs even further to expand margins? We think if we did that, it would be at the cost of GMS and revenue because we are such a lean organization and we manage every single head in our product and engineering organizations for ROI positive results. So we feel pretty good about how we're managing our cost space and the profitability that we're delivering.

Yeah, I mean, we haven't given forward guidance. I don't want to -- we're not going to give forward guidance. This is a team that has always cared about efficiency, has always cared about productivity. Every quarter in every year has been a quarter and a year of efficiency for this team. There's never been a year when we said, screw it, we don't care. And we want to make sure we're investing appropriately for the future. The margins in the core business are 30%. You can't find a marketplace of our size and scale with a margin anywhere close to that. And when you look at revenue per headcount, you've got to start looking at businesses that are multiples of ours, getting all of the fixed cost leverage that they get to get to comps like ours. So I think it's a real testament to how much we have always cared about efficiency. And we want to make sure we're investing appropriately for the very large opportunity that we feel we have. And we're always thinking carefully about how to balance that to make the value grow as much as we possibly can for all of our stakeholders.

Do you want to squeeze in a quick answer to Chris's second question about the app? Who's using it and...

Absolutely. So it's about 42% of our GMS now. It's growing quarter-on-quarter. It's about 45% of our active users that have downloaded the app. But when a user downloads the app, they start visiting us a lot more often, and their lifetime value goes up. In fact, the most lifetime value accretive thing you can do with a user is get them to download the app. It skews a little more young app users, but otherwise, we had thought for a long time that the only people who are willing to use the app are our most habitual users. We've been finding lately that many first-time users are downloading the app before they've even bought anything. So I think consumer behavior has really changed and we have an opportunity to make the onboarding and the app the first place and the centerpiece of your app experience where historically it's been a place that people have only been wanting to migrate once they've shopped on Etsy several times. I think that's very exciting for us.

Okay, we are almost at time, but I'm going to let -- Operator, let's get one more question in.

Our final question will come from Michael Morton with MoffettNathanson. You may unmute your audio and ask your question.

Perfect. Thank you. Congrats again, Rachel. I hope you enjoy the time. Two quick questions if I can. And one, Rachel, to follow up on your comment about fraud, you've highlighted that as a gross margin headwind, I believe, in the 10-K. So I was wondering if you could maybe quantify the effectiveness of the onboarding speed bump and how that's been a lift to gross margins and if it's something that we should expect going forward? And then my second question, I think, may be geared more towards Josh. And that's just talking maybe a little bit about the limiting factors for on-site ads. You've spoken that some sellers try to give you more money than you can allocate. Service revenue growth has decelerated, granted against tough comps. But just trying to think about the opportunity to grow that as a percentage of GMS or if we're at some type of structural limitation to the ad load? Thank you again for those two questions.

On the fraud, I think, first I'll say, I don't think we're ever done. And I think all large marketplaces and all businesses that have subscription models or take credit cards in any way, they're all experiencing the same thing. So I think we've done a very effective job of getting our fraud rate, which mostly results in us refunding buyers because a seller has promised to ship something that was fraudulent, but they never ship. Sometimes it results in chargebacks or other things. So with the rate very high in Q4 of last year, what we learned is that these fraudsters lay in wait for Q4 season and then it becomes rampant. So we're, I think a lot more savvy than we were last year. We've done multiple things. Seller onboarding fee was one of many things and I think it's been honestly helpful. Did we give a stat? I'm sorry, I don't remember on the impact of the seller onboarding. But it's been modestly additive to revenue, but that's not the main reason we did it, it was really to create that speed bump for sellers onboarding but we've done many other things in a whole portfolio of getting very sophisticated in fraud and it's allowed us to reduce the reserves that we put in place for fraud, what -- our fraud forecasts have come down. So we think we're in great shape for Q4 and we're -- all hands on deck and eyes wide open for what [they've been doing] (ph).

And on Etsy Ads, the rate of ad growth slowed, but actually take rate still modestly expanded as a result of Etsy Ads. So I continue to think there's a lot of opportunity in Etsy ads. As we've shared before, most of the sellers big enough to be using Etsy Ads are, some of them are giving us more budget than we can use. Some of them are giving us less budget than we can use. So nudging some of them to give us bigger budget is a lever. The biggest lever continues to be picking the right ad to put in front of the right buyer because that's the win-win-win. It makes the buyer experience better. It keeps the seller ROAS high. And that's something we're always very focused on, making sure the sellers get money, get value for money on this advertising investment. And obviously it's great for shareholders. So we continue to get better at showing the right ad to the right buyer. And that's where we're going to continue to drive take rate up from the Etsy Ads product. And I think there is still plenty of room for us to continue. Just as our search engine keeps getting better, it's very related to the ads search engine, which is also going to continue to get better.

Great, thank you. We went over by a few minutes. So I think we're going to call it.

I just want to close by saying again, Rachel, it's been a wonderful partnership. I know we're not done. We'll continue working together until the next CFO is seated. But as I told you privately, you have left large small shoes to fill. I'm really grateful for it.

Thank you. And likewise, it's been just a joy to be here.

She’ll be here for a while and we'll see you all soon. So thank you all.

Thank you.

Take care. Good night.

Thank you.