I would expect them to be investing heavily which means low FCF even with positive profits. I also doubt they are decreasing inventory (do they even hold it?)
Maybe the positive cf is just a fluke due to Xmas season? If you sell a lot before the end of the year, and only pay your sellers in Jan, and you have an exponential growth, then the positive cf may mean nothing..
If you look at their expenses, a huge chunk of their 'loss' is them issuing shares to employees. They're required to count this as a cash expense. You can make the argument that they could be profitable if they stopped granting shares, but in reality, this is part of their employee compensation plan and if they stopped issuing shares, they'd likely have to incur actual cashflow costs in order to keep their employees (eg. higher salaries or cash bonuses). Amazon is in a similar situation.
Some growing companies have positive cash flow but negative earnings as long as they are growing.
For example, they may take credit card payments from customers, but pay suppliers on terms. In which case growth causes consistent annual free cash flow higher than earnings.
Amazon is a decent example of this where their earnings suck, but their FCF has been reasonable every year.
I'm not sure about the particulars of how Etsy issues payment to suppliers though.
I would expect them to be investing heavily which means low FCF even with positive profits. I also doubt they are decreasing inventory (do they even hold it?)
Maybe the positive cf is just a fluke due to Xmas season? If you sell a lot before the end of the year, and only pay your sellers in Jan, and you have an exponential growth, then the positive cf may mean nothing..