Q1 2018 Financial Results

May 8, 2018

This presentation contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements include statements related to our business strategy, market size, financial guidance and key drivers thereof, the impact of our focus areas and key initiatives, our product launch roadmap and potential future growth. Forward-looking statements include all statements that are not historical facts. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “may,” “plans,” “will,” “intends,” or similar expressions and the negatives of those words.

Forward-looking statements involve substantial risks and uncertainties that may cause actual results to differ materially from those that we expect. These risks and uncertainties include: (1) our history of operating losses; (2) the fluctuation of our quarterly operating results; (3) our ability to implement our business strategy; (4) our ability to attract and retain an active and engaged community of Etsy sellers and Etsy buyers; (5) macroeconomic events that are outside of our control; (6) our ability to recruit and retain employees; (7) the importance to our success of the trustworthiness of our marketplace and the connections within our community; (8) our ability to enhance our current offerings and develop new offerings to respond to the changing needs of Etsy sellers and Etsy buyers; (9) the effectiveness of our marketing efforts; (10) the effectiveness of our mobile solutions for Etsy sellers and Etsy buyers; (11) our ability to expand our business in our core geographic markets; (12) regulation in the area of privacy and protection of user data; (13) our dependence on third-party payment providers; and (14) the potential misuse or disclosure of sensitive information about our members and the potential for cyber-attacks. These risks and uncertainties are more fully described in our filings with the Securities and Exchange Commission, including in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017, and subsequent reports that we file.

Forward-looking statements represent our beliefs and assumptions only as of the date of this press release. We disclaim any obligation to update forward-looking statements.

Forward-looking Statements

This presentation is a high-level summary of our Q1 2018 financial results. For more information please refer to our press release dated May 8, 2018 and filings with the SEC

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Q1 Key Accomplishments and Highlights

Accelerated GMS and Revenue Growth with stable margins

Improved buyer experience driving conversion rate gains

Created efficiencies from key foundational investments

Executed a $345 Million Convertible Debt Offering

Repurchased approximately $70 Million of Etsy shares

Raised 2018 guidance for GMS, Revenue and Adjusted EBITDA Margin

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GMS

$861M +19.8% Y/Y

+17.6% Y/Y (FX adj.)

Revenue

$121M +24.8% Y/Y

Net Income

$13M $0.10 EPS1

Adjusted EBITDA*

$26M 21.9% margin

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Our Strategy Continues to Yield Strong Financial Results

*Reconciliation of non-GAAP financial measures is contained in the Appendix. **Revised to reflect the correction of an immaterial error 1EPS reflects diluted earnings per share, basic EPS is $0.11

GMS Growth Revenue Growth Adj. EBITDA Margin*

1Q17 2Q17 3Q17 4Q17 1Q18

24.8%23.6%21.5%

19.1%18.4%

1Q17 2Q17 3Q17 4Q17 1Q18

21.9%

25.6%

21.4%

12.5%10.0%

1Q17 2Q17** 3Q17 4Q17 1Q18FX-Neutral GMSAs-Reported GMS

19.8%17.8%

13.2%11.8%

14.2%

FX-Neutral GMS 17.6%

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Etsy’s Virtuous Marketing Cycle

Improved experience

Leads to a higher conversion rate for new and repeat buyers

Leads to a higher LTV

Higher LTV enables more marketing spend

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2018 Balanced Portfolio of Investments

Foundational Longer TermImmediate

~20% ~60% ~20%

Focused on foundational investments, incremental growth initiatives and longer term projects

Examples:

• Help Center • Google Cloud • Technical Debt

Examples:

• Discovery • Machine Learning • Engagement

Examples:

• Search & Discovery • Trust & Reliability • Marketing Capabilities • Seller Tools and Services

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Foundational Investments Support our Product Roadmap

• Focus on improved operational efficiency and use of resources • Enhanced experience for buyers and sellers

• Faster processing speed and page load times • More nimble capacity utilization

• More agile development infrastructure to maintain velocity • Streamlined code base to improve page load times

• Data and privacy transparency, accountability and security for our community

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Delivering on our Four Key Initiatives

We estimate product enhancements launched in Q1 will generate over $75M in annualized GMS

Trust & Reliability

Search & Discovery

Marketing Capabilities

Seller Tools & Services

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Search & Discovery: Helps Buyers Find “Special”

Context Specific RankingPromoted Listings for a “wedding dress” search without CSR

Promoted Listings for a “wedding dress” search with CSR

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Trust & Reliability: Relieves Friction in the Buying Process

Scarcity Badges

New Structured Return Policy Free Shipping FiltersScarcity SignalsGuest Checkout

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Marketing Capabilities: Unique Inventory “Made With Love”

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Seller Tools & Services: Enable our Sellers to Drive Growth

Targeted Offers Custom Orders

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Q1 Results Highlight Improvements in the Product Experience

GMS Growth (y/y) Consecutive quarters of accelerated growth

Revenue Growth (y/y) Consecutive quarters of accelerated growth

*Reconciliation of non-GAAP financial measures is contained in the Appendix. **Revised to reflect the correction of an immaterial error

Adj. EBITDA Margin* Solid Adjusted EBITDA margin

Focused on initiatives that we believe have the highest probability of driving growth

1Q17 2Q17** 3Q17 4Q17 1Q18FX-Neutral GMSAs-Reported GMS

19.8%17.8%

13.2%11.8%

14.2%

1Q17 2Q17 3Q17 4Q17 1Q18

24.8%23.6%21.5%

19.1%18.4%

1Q17 2Q17 3Q17 4Q17 1Q18

21.9%

25.6%

21.4%

12.5%10.0%

FX-Neutral GMS 17.6%

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New Revenue Categories: Marketplace & Services

27%

73%

MarketplaceServices

Marketplace Revenue(Required)

• Listing Fee • $0.20 listing fee per item

• Transaction Fee • 3.5% transaction fee on

goods sold • Etsy Payments

• 3-4% + a flat fee charged in local currency

• 2.5% - 5% fee for foreign currency transactions

Services Revenue(optional)

• Promoted Listings

• Etsy Shipping Labels

• Pattern by Etsy

$88M, up 24.7%

$33M, up 35.0%

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1Q18 1Q17

(in thousands)

Revenue $120,912 $96,891

Cost of revenue 41,295 34,659

Gross profit 79,617 62,232

Marketing 26,194 23,454

Product development 20,721 18,116

General and administrative 18,904 22,763

Operating expenses 65,819 64,333

Income (loss) from operations 13,798 -2,101

Other (expense) income, net (817) 628

Net income (loss) $12,967 ($421)

Net income (loss) per share — diluted $0.10 $0.00

Condensed Consolidated Statement of Operations

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Convertible Debt Transaction

Launch Date: March 8, 2018Issue: Convertible Senior Notes due 2023Offering Size: $300 millionGreenshoe: $45 millionRanking: Senior unsecuredMaturity: 5 yearsCoupon: 0%Conversion Premium: 37.5%Concurrent Stock Repurchase: $42 million, 1.6 million sharesUse of Proceeds: Capped call transactions, general corporate purposes

Leveraging the strength of our balance sheet for long-term growth investments

Full Year 2018 Guidance

* Reconciliation of non-GAAP financial measures is contained in the Appendix. ** Based on the mid-point of 2018 revenue guidance

1 Original guidance issued on 2/27/2018 and revised guidance issued on 5/8/2018

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2018 Original Guidance1 2018 Revised Guidance1

GMS Growth 14 - 16% 16 - 18%

~$3.7B - $3.8B ~$3.8B - $3.84B

Revenue Growth 21 - 23% 22 - 24%

~$534M - $543M ~$538M - $547M

Adjusted EBITDA Margin* 20 - 22% 21 - 23%

~$108M - $118M** ~$114M - $125M**

Appendix

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1Q18 4Q17

(in thousands)

Cash and cash equivalents $533,855 $315,442

Short-term investments 67,526 25,108

Property and equipment, net 116,385 117,617

Accounts receivable, net 31,292 33,677

Other assets 121,107 113,739

Total assets $870,165 $605,583

Accounts payable $8,094 $13,622

Facility financing obligation 60,041 60,049

Long-term debt, net 265,415 -

Other liabilities 152,128 135,018

Total liabilities 485,678 208,689

Total stockholders’ equity 384,487 396,894

Total liabilities and stockholders’ equity $870,165 $605,583

Condensed Consolidated Balance Sheets

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1Q18 1Q17

(in thousands)

Net income (loss) $12,967 ($421)

Excluding:

Interest and other non-operating expense, net 2,667 2,152

Provision (benefit) for income taxes 14 (1,052)

Depreciation and amortization 6,320 6,938

Stock-based compensation expense 5,740 4,043

Stock-based compensation expense-acquisitions 714 842

Foreign exchange gain (1,850) (2,780)

Restructuring and other exit costs (income) (151) —

Adjusted EBITDA $26,421 $9,722

Etsy is not able, at this time, to provide GAAP targets for net income margin for 2018 because of the unreasonable effort of estimating certain non-cash items that are excluded from non-GAAP Adjusted EBITDA margin, including, for example, provision or benefit for income taxes and foreign exchange gain or loss, the effect of which may be significant.

Reconciliation of Quarterly Net Income (Loss) to Adj. EBITDA