Why Etsy, Inc. Stock Climbed 13.9% in August

Markets Motley Fool

What happened

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Shares of online marketplace Etsy (NASDAQ: ETSY) had a nice August, rising 13.9% during the month, according to data provided by S&P Global Market Intelligence. Optimism toward the stock during the month can be mostly traced back to a single day, when Etsy reported better-than-expected second-quarter results, including a surprising profit and a 19.1% year-over-year increase in revenue.

Investors were likely also pleased with Etsy's progress on streamlining its organizational structure, as management said the efforts are expected to positively affect profitability in the remainder of the year.

So what

Etsy's better-than-expected revenue was primarily driven by a 25% year-over-year increase in the company's seller services revenue. Etsy's seller services revenue accounted for 58% of revenue, up from 55% of revenue in the year-ago quarter. Etsy said its impressive seller services revenue growth was helped primarily by growth in Etsy Payments.

Now what

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Looking ahead, management said it expected accelerated testing and deployment of new Etsy.com products, higher conversions on both mobile and desktop, and continued growth in seller services revenue thanks to strength in Etsy Payments and promoted listings.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool recommends Etsy. The Motley Fool has a disclosure policy.