Hi, everyone. And welcome to Etsy's Fourth Quarter and Full Year 2023 Earnings Conference Call. I'm Deb Wasser, VP of Investor Relations. Today's prepared remarks have been pre-recorded. Joining me today are Josh Silverman, CEO; and Rachel Glaser, our CFO. Once we are finished with the presentation, 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 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 the 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. We're pleased to speak with you today about our recent performance, but more importantly, to preview some of our exciting initiatives for 2024. We've built an ambitious portfolio of growth initiatives, what we consider some very bold moves, while staying focused on protecting or expanding our overall profitability. We've done a lot to set Etsy up for success, making some difficult choices last year to be able to invest in our Vital Few with an eye to getting Etsy back to growth. We enter 2024 energized, with the right team, a highly relevant and differentiated Right to Win strategy, a disciplined investment approach and a resilient business model. Our focus will be to make Etsy even more Etsy, leaning into our core strengths to get even better at what we do, that is unlike anyone else in e-commerce. We had a strong finish to 2023 in the core Etsy marketplace, as well as at our subsidiaries, which collectively brought Q4 in a bit better than expected, as Rachel will review shortly. The Etsy marketplace performed well during the holiday season, with our highest-ever Cyber 5 GMS up about 4% year-over-year. Both Cyber Monday and Gifting Tuesday set new records. We know Etsy is a great place to shop for gifts and our focus on this message paid off. More to come on Gifting in a moment. With this strong finish to 2023, consolidated GMS was $13.2 billion, roughly flat with 2022. Revenue was a record $2.7 billion, up about 7%. Adjusted EBITDA was about $754 million. And free cash flow was very strong at about $666 million. Etsy's ability to deliver healthy revenue growth and strong levels of profit and cash flow gives us great confidence in the power of our special financial model and our ability to…

Thanks, Josh. And thank you, everyone, for joining our fourth quarter call. My commentary today will cover consolidated 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 and quarter-over-quarter consolidated results. Etsy delivered $4 billion in consolidated GMS, roughly flat to the fourth quarter of 2022. FX benefit moderated to 90 basis points in the fourth quarter, down from the 130-basis-point tailwind in the third quarter. Revenue increased 4.3% year-over-year to a record $842 million. And adjusted EBITDA grew to an all-time quarterly high of $236 million, up nearly 4% from the prior year. Note that Elo7's divestiture resulted in small headwinds to both GMS and revenue for the quarter, and was modestly accretive to consolidated adjusted EBITDA margin. Following a challenging October, Etsy's marketplace's year-over-year GMS trendline improved in November and December due to the solid holiday performance Josh described earlier. We had a nice end to the quarter with better-than-expected GMS growth across all of our brands, enabling us to come in slightly above our mid-December revised guidance for GMS and revenue. Within our consolidated year-over-year revenue growth of 4.3%, consolidated marketplace revenue grew 2.6% due to higher payments revenue related to a mixed shift of more international transactions that yield higher fees, growth in subsidiary payments fees and higher offsite ads revenue. Services revenue was once again a key contributor to growth, increasing 9.4% year-over-year. Etsy Ads was the primary driver of this strength, with continued improvements to add relevance. We delivered a consolidated take rate of 21%, largely flat to the prior quarter and slightly above the take rate implied at the midpoint of our quarterly guidance provided in mid-December. For the full…

[Operator Instructions] Thank you. Our first question will come from Nikhil Devnani with Bernstein. You may now unmute your audio and video and ask your question.

Hi there, thanks for taking the question. Appreciate it. And thanks for providing '24 commentary as well. I just wanted to ask about the GMS outlook a little bit more. Can you talk about the kind of magnitude of improvement that you're expecting to see in GMS as the year goes on? Do you think that there is line-of-sight back to positive year-on-year growth as well at some point in the year? And then as a follow-on, could you provide some clarity around product and marketing initiatives that are kind of backing up this outlook for improvement in GMB? Thank you.

Okay, so in terms of the magnitude of the growth, we gave you what we're comfortable giving you right now. So anything more than that, if we could have been more specific, we would have in terms of when do we get back to positive growth and et cetera. It's certainly our aspiration. We believe we have every right to be growing not just positive but faster than e-commerce. And we think, especially when our categories stop being under such pressure and when discretionary consumer product spend in particular stops being under so much pressure, that's going to be very helpful. We do think we outgrew our categories yet again, our pure-play competitors in our categories yet again in the fourth quarter. In terms of the product and marketing initiatives that we expect to drive a lot of growth, we laid them out in the call. And so first on consideration, that is the biggest thing; people thinking to look on Etsy. Because when they do think to look on Etsy, they usually find something really compelling. So Gift Mode is a great example of us giving you a moment in time when you should really think, I need to buy a gift, I want to go to Etsy. And gifting is an all-year kind of thing. It's not just Mother's Day and Christmas. There's birthdays, anniversaries, back-to-school and on and on. And on other key elements in consideration, we've said we're in early stages of planning a loyalty program, which is designed to drive consideration among loyal users, more value, more on quality and more on reliability. And I think that that portfolio of bold initiatives, I think can do a lot to continue to drive growth, combined with compelling marketing campaigns. We're going to continue to work through the funnel on really compelling marketing campaigns as well.

Thank you.

Our next question comes from Ygal Arounian with Citi. Please unmute your audio and video and ask your question.

There you go. Sorry there's a little delay there. Thank you. I'm going to follow up on that a little bit, maybe more narrowly focused, I guess, on the 1Q guidance. And, what -- it sounds like, sitting here today, were down mid-single-digits, but kind of the expectation is that over the course of the quarter, that starts to improve. What happened so quickly, I guess, like between now and end of March or it's just a little bit over a month. And then again, also just to dig into the marketing a little bit more. So you're -- you've pulled back a little bit on performance marketing. Some of that is efficiencies, some of that is coming from the competitive environment are spending more on brand. Typically, we think of the payback period for the brand marketing being a little bit longer where you're expecting that to drive incremental growth both in the quarter and throughout the year. So are you starting to see the benefits of that? I know it's been investment over, multiple years here. Is that starting to pay back the way you like or, how else should we think about that? Thanks.

I can certainly jump on. I mean, so the way -- you're right that January was a little bumpy. And that's the -- sort of the baseline from which we are able to provide guidance for the rest of the quarter. The way we do our planning is we estimate the incremental GMS that would be generated from each discrete product and each discrete marketing investment that we make. So they start to stack on top of each other. And we do a pretty good estimation and testing before we build our forecast so that we have a pretty high confidence level in what we think those things will deliver. So what we're looking at that remains in the rest of the quarter, we feel good about being able to step incremental GMS from where we are today. We have experimented with our marketing spend. I mean, looking back a little bit in the early part of the quarter on some of our PLA spend, we're now back to our normal levels. So we think we'll get some incremental benefit from just the regular business-as-usual marketing spend. And you saw us do a very large, first time ever, big-game television ad that is -- that ad continues to run through the rest of quarters, winning some of the accolades and awards from the advertising world and starting to gain some traction. I think the - it takes - it's something like 7 to 11 views to actually create that stickiness of an ad. So we're excited about what that brand - the repetition of that campaign and that brand can do for consideration with our customers. And there's a lot of things we wrapped around that Drew Barrymore, our Chief Gifting Officer. And a lot of our promotional campaigns that we also laid down to attract people. So marketing and spend product, I think we expect to deliver GMS in the quarter.

Yes, and just to build on that. We have been very focused year after year on what is the value creation of every single squad and what is the value creation of every single dollar we spend in marketing. It has been a very big focus of ours and we think we're pretty good at it. What obviously we can't predict with perfect accuracy is what's going to happen with the baseline, what's going to happen with the overall consumer discretionary spend in our categories. And so that's the unknown and, we'll wait and see. But we gave you the best guidance we know. And we do -- we have reason to believe that we should see trends improve in the second half of the quarter based on the work we're doing.

Okay, great. So you might step back a little bit further into performance. Has the environment there changed at all?

Yes. So performance is dynamic on a, really, hour-to-hour basis depending on the ROI we're seeing on every dollar we're spending. And we've got pretty sophisticated algorithms that work on, is this bid -- is this click worth this much right now and how much should we bid. And so to the extent that CPCs rise, we naturally pull back, or to the extent that CPCs lower, we naturally lean in. The other thing, by the way, it's not just CPCs, it's also conversion rates. So in times when people are really budget constrained, we see them actually -- we see conversion rate across the industry go down. We see people comparison shop a lot more. And so we are looking at all of that. And not humans, but machines using AI are looking at a very sophisticated way of what's happening with conversion rate right now, what's happening with CPCs right now. And therefore, how much is each visit worth and how much should we be bidding. And it naturally titrates. It's a little bit the reason why it's hard to pinpoint exactly what our margin is going to be in any given quarter because it's based on what's the ROI we're getting right now, and we'll naturally lean in or pull back. What we won't do is send them unprofitably. Not on purpose. So we work hard to try to understand what is the return we're getting. And if the market we think is getting irrational or at least irrational for us, we pull back.

Thanks, Ygal. Operator, next one?

Our next question comes from Lee Horowitz with Deutsche Bank.

Great. Thanks for taking the question. Maybe two, if I could. Josh, you highlighted two charts in the deck, one that shows the Etsy's share gains versus pure-play comps. It seems to stand somewhat in contrast to the overall e-commerce market where Etsy is growing more slowly. It seems that would suggest that big-box non-pure-play competitors are taking share of the overall. I guess, why do you think consumers are leaning into these platforms that, as you say, compete on shorter speeds, perhaps a couple of bucks in price and not leaning into things like product quality or uniqueness? And maybe how do you think that may evolve in '24 and beyond? And one follow-up, if I could.

Great. Great question. So look, let's put aside travel, online dining. If you look at e-commerce very broadly, it picks up things that are totally unrelated to Etsy. When you put those aside and you really look at just product, it's very clear that the people gaining share are Amazon, Walmart, Temu, and SHEIN, and almost everyone else is losing share. The number of other people that are growing quickly, you can count on one hand. Almost everyone is losing share to Amazon, Walmart, Temu, and SHEIN. And so, first of all, those are people, particularly if we look at Amazon and Walmart, and they're really the big winners. So if you look at who is actually, in terms of volume, taking volume in e-commerce, they sell essentials. And when you read their earnings call scripts, what they say in their earnings call is what's driving their sales is essentials and their headwinds are discretionary products. The second thing is all four of those brands stand for deep discounting. And the trends we see right now are people feel their wallet is under a lot of pressure. By the way, tax returns look like they're going to be lower this year than they were last year. You still hear low consumer confidence and concerns about inflation on core things like food prices. And people, when they have discretionary dollars, want to spend them on travel and want to spend them on dining. And so in this moment, many people are looking for the cheapest way to buy something when they need to buy something that is discretionary. Now in that environment, Etsy added 8 million new buyers. Etsy buyers spent $3.6 billion on the Etsy marketplace in the fourth quarter alone. So, tens of millions of people are -- 92 million people, in fact, are opening their wallet to come and buy something on Etsy even in this environment. And in fact, the average buyer on Etsy is spending 20% more, more than 20% more today than they were pre-pandemic. But this is a time when I think products that are not the cheapest possible are out of favor. And I don't think that's forever. When I imagine, going forward, does everyone always wants the cheapest version of any given product? No, absolutely not. I think that that trend, this is a cycle, we're in a moment in the cycle, and I think we'll move to better moments in the cycle, hopefully, soon.

Let me add just a couple of quick points about things that are happening that point specifically to January and Q1 activities that are happening in the macro world. One, at Christmas time, people get a lot of gift cards. And today, Etsy doesn't have a gift card program. And they come into January and they spend -- they go into retail and they spend their gift cards at places like Walmart and Amazon. Second, they are doing a lot of returns when they're going physically into the stores and doing a lot of returns. And the third is that big-box stores are doing all their clearance right now, so things are continuing to be at deep, deep discounts, as Josh just said. Those are three things that in, the early part of this year, Etsy really wasn't in the game on those three areas and, I think, affected our January's GMS to some extent.

Very helpful. And then maybe one follow-up on marketing. How do you guys just think about, I guess, efficiently deploying performance marketing dollars in 2024? Obviously you talked about dynamic -- the models are dynamic, but do you feel like you need to perhaps lower the ROI thresholds, given you have a weaker consumer as you called out, but, rising auction costs from those competitors? I guess just help me understand, how you guys maybe are adjusting the way you guys think about marketing, given the challenging underlying dynamics of higher costs but tougher demand.

Well, the models automatically incorporate -- well, there's some lag. It takes a couple of weeks for them to experience the fact that conversion rates, for example, are down or up, for them to incorporate that. But things like weaker demand turning -- meaning, conversion rate goes down, the models all automatically incorporate that. Where we're always refining our understanding is we run an incrementality test. For example, on PLAs twice a year, we hold part of the pantry dark. And we look at if we hadn't bought that click, would we still have gotten it anyway? And it turns out that often, the answer may be yes. It also may be that if someone didn't click on Etsy, but they saw Etsy, it made them think, Etsy sells that, and they come without having clicked. And so you can over or under-attribute. And so several times a year, we actually run a test to determine, what we call incrementality tests, how much of the final sale value should we attribute to the fact that someone clicked on that ad. And that changes over time as well based on competitive environments. So we are constantly adjusting based on that. And another input that goes into the model is what do we think about things like future take rate. What you're paying today, would that impact the LTV of a buyer if you think your take rate might go up over time, or if you think you might get more or less frequency over time? So there's some amount of judgment you make, but the models do most of the work. And we really do try to let the models do the work so that we aren't tempted to irrationally over or under-invest in any given quarter.

That was a great point on the LTV -- we're constantly updating the model to increase LTV with every new product launch that we have. As the LTV goes up, that's incorporated in the attribution model. So that's happening. The other thing is you talk about performance ads, specifically, but we've been able to start to spend more money in new channels, like so paid social and in new geographies. And we've experimented with other kinds of marketing, like we use Etsy's P&L to do some Etsy-funded promotional campaigns. So we're constantly -- it would be great to get another Google PLA channel, for instance, that works as hard for us. So that's where we do more of our experimental marketing spend to see how we can optimize to get those channels to be ROI positive as well. Less likely would be to just drop the ROI threshold and accept a negative return.

Right.

All right, great. Thanks, Lee. Next question?

Our next question comes from Shweta Khajuria with Evercore ISI.

Thanks for taking my questions. Let me try two, please. On the GMS growth for this year, has the visibility for you changed, and I guess what gives you the confidence in improving GMS growth? If you could please lay out the key drivers, is it consideration and the gifting initiative primarily driving it and/or quality, value, reliability drivers? If you want to point to any of those. And then the second question is on the $90 million in savings that will largely be reinvested, could you please provide a little bit more color on biggest buckets of investments? Thank you.

Yes, I'm happy to take the first, if you want to add. So, yes. So we laid out, - first, Shweta, thanks for the questions. And, that slide that had consideration and quality, value and reliability with key initiatives under each, that's a pretty good roadmap for some of the bigger levers of the year. There are a lot of other things we're constantly doing to just incrementally get better in ways that drive real measurable value. But the way we run this business is we task every squad in the company with a value-creation goal. So if you're working on shortening expected delivery date or surfacing higher-quality items higher in search, there's a customer metric, but there's also a, how much extra GMS does that need to produce? And the sum total of that for last year is we think the team produced about $1.5 billion of incremental GMS. We've tasked the team with more, even more efficiency than that this year. We continue to find ways to get more efficient, leveraging new tools and techniques, leveraging new processes. We're pretty agile and we work on getting even more agile and even more focused. And then with performance marketing and above-the-line marketing, we're also always working to get more efficient. And I'm realizing now is when I talked about how the algorithms are doing the work, I don't want you to think it's static. We also have multiple squads working on MarTech. And they're constantly focused on things like, how can we make our landing pages more efficient? How can we perform better in SEO? How can we make our bids, you know, even more sophisticated, segment our audience even more? So we're constantly driving efficiency gains from each of our teams and each of our dollar spend. And so what we've done is we've looked at our plan for the year, what we think it's going to deliver in terms of incremental GMS. The assumption on that, again, is what's going to happen with the baseline, and that is the part that's hard for us to know. So the risk in this plan is, you know, I think we're going to execute on the plan and I think we're going to drive a lot of value. And what's going to happen with the baseline and to what extent is that a tailwind or a headwind to us for the year is still yet to be known.

On the $90 million, a couple of things that I want to point out. We reduced our workforce by about 12%, and we cut various operating expenses where we thought that there was room to cut them without losing any productivity or efficiency in operating our business. Of the workforce reduction that we made, we also reduced future open hires. So the -- we not only saved current dollars, but we're saving some future dollars. We -- our main focus is always on the Vital Few. So what we -- the guiding principle of what we are about was to reprioritize and realign our teams to be working on the fewest possible things that are driving the highest possible impact. That does not mean that we've stopped hiring and that we've stopped investing. We see so much room for growth. We talked about our $500 billion TAM, we're in less than 2% of it today. We just have so many ideas. Josh laid out a bunch of them that we're currently working on, on the call. So we're continuing to invest for growth. We are at the top of the pack in terms of revenue per headcount in the company. We're very lean. Etsy alone, just Etsy, is only about 1,800 people. And the revenue per head, it's hard to find companies of our size and shape that have revenue per head, you know, higher than that. We're really winning there. And if we cut too far back, we're going to, you know, get in the way of our own ability to invest for growth. So we feel very comfortable with finding -- constantly looking for, you know, operational efficiencies, very comfortable with the way that we've reprioritized our expense buckets and very comfortable with the level of investment we're making going forward.

And I just would add that I find the whole commentary on the year of efficiency interesting because every year is a year of efficiency for us, every quarter is a quarter of efficiency. There hasn't been a quarter or a year when we've said, screw it, let's just, you know, invest and hope for the best. We've been obsessed with efficiency and value creation per dollar invested for the seven-plus years that Rachel and I have been here. And so every quarter we are looking at, is there a way to squeeze more efficiency? Is there a way to cut more cost? And when we find an opportunity to cut costs, the first thing we look at is can we invest that -- reinvest that profitably to drive growth. What's going to really move the stock price is getting growth, getting GMS growth up again so that we're driving the multiple. That's what's going to drive growth, but we have to do with cost discipline. So what we're not going to do is invest irrationally, invest a dollar to get a dollar or less back. So when we see an opportunity to put that money back into something that's going to drive growth, we're going to do it. The result of that is a business where at the core marketplace on Etsy generates EBITDA margin right now over 30%. It's hard to find a marketplace of our size and scale generating EBITDA margins anywhere close to that. And we're very focused on also reinvesting for driving growth. And we're going to continue to make sure we balance those two with an emphasis on investing in growth when we think there's a good opportunity to do so.

Thanks, Shweta. Because you got two in there, we're going to go to the next question.

Thanks.

Thanks, Shweta.

Our next question comes from Steven Forbes with Guggenheim Partners. Please unmute your audio and your video and ask your question.

Good evening, everybody.

Hi, good evening.

I mean, maybe just to expand on some of the initiatives, you know, like Gift Mode and loyalty, you mentioned the investment in the Big Game advertising. You know, anytime you sort of hear loyalty, you know, it helps if you can maybe contextualize what you're thinking of doing with loyalty as we, you know, potentially have like timing disconnects with the benefits and, you know, maybe some market implications. So, you know, just any sort of expansion on what you mean by loyalty.

Sure. I would say we don't have anything to announce yet. And I know that's not going to be very satisfying, but we pay a lot of attention to loyalty economics in a lot of places, having cited Amex, where not only does Amex run really big loyalty programs and things like membership rewards, but we partnered with when I was at Amex Delta and Starwood and a lot of other places. Had a chance to study a lot of loyalty programs. And thinking hard about, which are the ones that truly drive more return and truly drive more consideration, is a big focus for us. It's got to have both rational and emotional benefits. It can't be just rational. There's got to be some yearn to it. And the goal is to get people to consider Etsy more often. People love Etsy. Talk to buyers and they're all going to say, I love Etsy. Why didn't you shop in Etsy more often? I didn't think of it. So committing to some form of loyalty program, we think can get them to prioritize Etsy and say I'm in this loyalty program, I should stop by Etsy and see if they have something to offer. If we can just get them to stop by, and see if we have something to offer, the answer is going to be yes, a whole lot of the time.

And then maybe just a quick follow-up, right. A lot of noise out there in terms of AOVs or ticket-related challenges, across the discretionary landscape, or just where deflation is, right, within the respective categories. You mentioned sort of this optimism around stabilization in GMS per active buyer. Curious if you could maybe expand on what's giving you the optimism, and what you're seeing with price behavior across the product categories you serve.

It has stabilized a bit. If you look at the last four quarters, GMS per active buyer have been relatively stable at $126. So that's good news. And by the way, that's up from about $100 before the pandemic. So in spite of all the headwinds, and everything we've talked about with the macro, still spending 20% more, more than 20% more than they were pre-pandemic. In the headwinds for the beginning of this quarter, when we said we were off to a slower start, AOVs are down slightly. So when we talk about starting from a low - down mid-single digit and guiding to - we think we will get back to low single digit, by the end of the quarter. One of the headwinds we're seeing is AOVs are down. The good news on that is, it means transaction volumes are actually holding up better than, what those numbers would suggest. Buyers are still coming and buying on Etsy. They're just even more price sensitive in this moment. And that, I think, is pretty consistent with what we hear with a lot of others.

Thank you.

Our next question comes from Anna Andreeva with Needham & Company.

Great. Thanks so much. Thanks for the color guys. We had one question on take rate. Came in a little bit better than expectations in the fourth quarter. What's driving that expectation for the year to be at or higher than Q4 levels? I think you mentioned some of the seller onboarding fees. And then secondly, the number of churn buyers, I think, increased a little bit in 4Q. Can you further elaborate on that? Thanks so much.

I'll take the first, you take the second. Okay. So the - we rolled out Etsy Payments to nine more markets. So that helps us a lot with incremental transaction fees that we just weren't getting before. And today, we launched the seller fee, which not only has the benefit of incremental take rate, which, by the way, completely is reinvested back in safety of the marketplace. But it creates - did you call it friendly friction earlier? Friendly friction so that we create a little speed bump, for not just any seller can create a listing for $0.20 and some kind of product. It's a moment to think about, well, I'm going to have to make payments fee. And that helps us with bad actors on the site, so that we get both the benefits of that.

Yes. And that, by the way, is not a big take rate driver. I think the revenue in that is going to be relatively small, but it's going to be good value exchange, making sure it's really secure to become a seller on Etsy. And I think that's good for all of the sellers and the buyers on Etsy, and the fee we're charging is nominal. If it's not worth $15 to create a shop on Etsy, then maybe you're not committed enough to likely succeed on Etsy. But that's not a huge revenue driver. We'll continue to see payments coverage expand in other markets and other areas where we think there's fair value exchange, and we think we'll achieve the take rate that we guide into.

Let me add a quick one to that. Just also when we see international business increase, we get a slightly higher take rate on Etsy Payments where the buyer and the seller are two different currencies, because we have a premium that we charge for that currency exchange. So that's another thing affecting take rate. And lastly, we did see nice lift from Etsy ads again, and we'll continue to see Etsy ads improvement, as we continue to make investments in the better - and better the search broad relevancy is for Etsy ads higher the conversion rate.

And on active buyers, we ended the quarter - ended the year with about 92 million active buyers on a trailing 12-month basis. So at an all-time high. Roughly stable. I don't want to crow too much about it, roughly stable from the prior quarter. But I'm not sure where the comment about more churn was, but I'd say active buyers have been stable.

Okay. Thanks so much guys.

Thanks, Anna.

Again and I think last one is going to be from Jason, right? Operator?

Jason Helfstein with Oppenheimer is our next question.

Hi Jason.

Hi Jason.

Hi, thank you. So two questions, really one is a question everyone's going to ask. How are you thinking about helping sellers correct - use correct pricing and not just undercut each other and just be more sophisticated with optimum listing prices? And the second, really, to ask, a common investor concern we hear is really around the ability to grow cohorts. Is it something you would provide in the future, perhaps like annual GMV, by cohort on the year of acquisition, I think would help people better understand...?

We have that in our 10-K. We have GMS retention in our 10-K, which will be filed tonight, tomorrow morning.

Yes, you'll have it very soon. So it will be a stack bar every year. The class you joined in 2017, what have they delivered to the class in 2018 all that stuff. And what I think you'll see in those cohorts, just to start with that, is I'm used to, in a lot of e-commerce business, is seeing that ask until down over time. And what you see with Etsy is that it's been more of a smile curve. And we think that's really healthy. Obviously, the inflection drove just like a massive uptick and then a little bit of a settling back down, which makes everything a little messy, a little harder to make sense of. But the fact that the cohorts, do generally stack on each other really nicely, we think, is a pretty powerful part of what makes Etsy really compelling. And we've still just been experiencing a bit, of when you look at the stacking of those cohorts, dealing with the post-pandemic, slight compression coming out of the post-pandemic has -- just provides a bit of a headwind. On your first point…

Seller pricing.

Yes. Helping with seller pricing. Great. Great question. So a couple of things. One, we've had a very big focus on not hand made. And we've shared in the past that the percentage of views that encounter an item that's not handmade is - I think the last time we gave an update, it was cut in half. We've made even more progress since then. So it's a very big focus of our, to make sure that mass-produced items are not visible on the site. It's bad for the brand. And it's not helpful for our sellers in terms of price competition. But another thing I talked about very briefly in the call, let me unpack that a little bit more, is really elevating quality even more in search results. And what I mean by that is our search algorithm today, is designed to pick items you're likely to buy, right? So the search algorithm using cutting-edge machine learning is saying, what's Jason likely to purchase. What we wanted to do is say, what's Jason likely to love, purchase and loved. And so forming more of a point of view around does the seller give consistently good quality service, is the item consistently delightful and that leading to frequent - more frequent purchases. Gaining that kind of fidelity and filling a point of view, what's the quality of photography here, what's the quality of the return policies? Does the seller consistently ship on time? And using that to create an explainable AI model, to rank who should be on top in search, we think can unlock a ton of value, especially as you then start to expose that to sellers, and say to sellers in order to rank higher, the way to do that is to get better on one of the following metrics. Here's how you're currently doing. And the better you do on these metrics, the better you will rank in search. That creates a race to the top. And I think that's an incredibly exciting thing that, we're going to do that we're very focused on right now. It's one of the initiatives I talked about this year, and I think that over the kind of next couple of years can have a very big impact. So Etsy does far, because our unexplainable machine learning model is incredibly sophisticated at picking the thing you're likely to convert most at. And so, we've got to come up with an explainable version of the model that doesn't do any damage at least, right, that can largely match our black box model. And then get better from there. And there's some R&D that needs to happen, and that's the kind of R&D that's happening right now.

All right, great. All right. Thanks, Jason. I think we went over time, so operator, I think we're going to cut it here.

Thank you. That concludes the call for today. We appreciate your participation. Have a great evening.

Thanks, everyone. Thank you very much.

Thank you.